Oil Snaps Two-Day Drop With China Demand and Russia Cap in Focus




  • In Business
  • 2022-12-05 23:55:28Z
  • By Bloomberg
 

(Bloomberg) -- Oil rose for the first time in three days on optimism China's reopening will buoy demand, and as investors assessed the implications of the price cap imposed on Russian crude.

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West Texas Intermediate climbed above $77 a barrel following a roller-coaster session on Monday, when a broad shift away from risk assets saw prices close down 3.8% after earlier gains. The initial advance was driven by signs China, the world's largest crude importer, was continuing to ease Covid curbs.

The market is weighing the long-term impact of the latest round of restrictions placed on Russian crude by the European Union and Group of Seven to punish Moscow for the war in Ukraine. These include limits on insurance and a $60-a-barrel cap on Russian oil. So far, although some ships are stuck near Turkey in part due to the changes, there's been no widespread disruption.

Oil has rebounded since hitting the lowest level since late 2021 last week as demand prospects brightened, especially in China. Authorities have been gradually scaling back virus restrictions following rare protests. That contributed to a decision by the Organization of Petroleum Exporting Countries and its allies to stand pat on output policy at the weekend.

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