Oil heads for weekly gain ahead of OPEC+

Oil headed for its biggest weekly gain in nearly two months as China eases virus controls, Washington considers pausing sales from strategic reserves and a weak dollar boosts the commodity’s appeal. U.S. crude held above $81 a barrel after a four-day rally. The rise in prices comes ahead of a key meeting of the Organization of the Petroleum Exporting Countries and its allies over the weekend and a last-minute move by the European Union to agree on a price cap for Russian oil. Beijing, the world’s largest oil importer, has again eased its zero-Covid policy, saying it will allow some infected people to isolate at home. In addition, People’s Bank of China Governor Yi Gang said the central bank was now focused on economic growth, helping the outlook for energy consumption. Neil Beveridge, senior oil analyst at Sanford Bernstein, said on Bloomberg TV in Hong Kong that China was moving toward reopening “a little faster than we expected after the protests that we saw.” “If China acts next year, that will really turn things around,” Beveridge said. The bright outlook was reinforced by calls from the Biden administration to halt sales from the Strategic Petroleum Reserve and allow the country’s emergency stockpile to be replenished. EU wants $60 cap on Russian oil The European Union is close to reaching an agreement to cap the price of Russian crude at $60 a barrel, Bloomberg reported, citing sources familiar with the matter. But the sources said Poland was continuing to press for tougher sanctions packages before signing on to the plan and that talks on the issue would continue. While the Warsaw government has demanded additional sanctions be included in the price cap plan, talks have been ongoing since last week without yielding a result. The European Union is preparing to create a mechanism that would allow price revisions every two months, according to a draft document.