Oil rises on chances of OPEC+ output cut, easing China COVID curbs
LONDON, Dec 1 (Reuters) – Oil rose about $2 a barrel on Thursday on the chance of further supply cuts by OPEC+ and as easing COVID curbs in China raised the likelihood of higher demand from the world’s top crude importer.
Crude also gained support from dollar weakness prompted by euro zone factory data and the Federal Reserve Chair saying the pace of U.S. interest rate hikes could be scaled back. A weaker dollar makes oil cheaper for other currency holders and tends to support risk assets.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, will meet on Dec. 4. Though sources said on Wednesday a policy change is unlikely, some feel that a further cut cannot be ruled out.
“I believe the OPEC+ meeting forces shorts to cover, but the consensus is unchanged quota levels,” said Tamas Varga, of oil broker PVM.
“Perceived easing of Chinese COVID restrictions, favourable factory data from the euro zone and the resultant dollar weakness provide continuous price support.”