After falling for two days, oil prices rebounded on Tuesday on hints that China is relaxing its Covid Zero policy. Meanwhile, a G7 price cap on Russian oil went into effect on Monday, prompting investors to gauge the impact on global flows.
Brent crude futures had risen 71 cents to $83.39 a barrel as of 10.26 A.M. (Thai time). West Texas Intermediate crude (WTI) rose 66 cents to $77.59 a barrel.
Futures dropped over 3% the previous day as data from the United States’ service sector raised concerns that the Federal Reserve would continue its aggressive policy tightening.
The G7 nations, the European Union, and Australia have implemented the price cap, which comes on top of the EU’s embargo on Russian oil imports by sea and similar pledges by the US, Canada, Japan, and Britain.
The price cap is an effort by the West to limit Moscow’s ability to fund its war in Ukraine, but Russia has stated that it will not abide with the policy even if it means cutting production.
Meanwhile, the Organization of Petroleum Exporting Countries and its allies, including Russia, agreed on Sunday to continue its October plan to reduce output by 2 million barrels per day (bpd) beginning in November.
Meanwhile, China’s capital Beijing announced that negative Covid tests will no longer be required to enter most public areas, such as supermarkets and commercial buildings, the city government said in a statement on Tuesday, in what is seen as an accelerated exit from the harsh Covid zero policy.