Oil prices advanced on Tuesday on speculation that China may ease its strict lockdowns to contain Covid-19 after protests against the policies swept the nation.
Brent crude, the international standard, rose 2.5% to $85.25 a barrel. West Texas Intermediate, the U.S. benchmark, climbed 2.3% to $78.97 a barrel.
Chinese authorities held a press conference on its health policies on Tuesday and reported an increase in vaccination rates among senior citizens. The country has been forced into repeated lockdowns this year, to protect the vulnerable. That has also throttled economic activity as social interactions were curtailed.
Separately, European Union officials continued to discuss a price cap on exports of Russian crude after failing to reach an agreement over the past week.
The European Commission on Monday proposed a cap of $65 a barrel, but countries nearest to Russia such as Poland, Estonia, and Lithuania insist that’s still too high and allows Russia to make too much profit from sales to fund its war in Ukraine. While the West has vowed to wean itself off of Russian crude, its exports are still feeding into the global market through Asia.
Other EU members with big shipping industries are pushing for a higher cap on Russian crude. The price limit, which will be enforced by Group of Seven members, is due to come into effect on Dec. 5.
Other factors continue to push down on oil prices, which have now fallen back below the levels they were at when Russia first invaded Ukraine in February. Prices were briefly negative for the year on Monday.
Federal Reserve officials continue to insist that more interest-rate increases are needed to contain inflation, which will hurt global demand for energy.
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