RIYADH: Oil prices rose on Thursday, extending a more than 3 percent rally in the previous session, boosted by record US crude exports and a weaker US dollar, though gains were capped in Asia due to lingering fears over slack demand in China.
Brent crude futures gained 20 cents, or 0.2 percent, to $95.89 a barrel by 0332 GMT.
US West Texas Intermediate crude climbed 19 cents, or 0.2 percent, to $88.10 a barrel.
Western officials finalizing plans for Russia oil-price cap
US and Western officials are finalizing plans to impose a cap on Russian oil prices amid a warning from the World Bank that any plan will need active participation of emerging market economies to be effective.
Officials said no price range has been decided yet, however, one person familiar with the process said the cap will be determined in line with the historical average of $63-64 a barrel — a level that could form a natural upper limit.
Such a level is in line with recent comments by Treasury Secretary Janet Yellen that a price cap in the $60 range would give Russia an incentive to keep producing oil.
The administration of President Joe Biden has seen the price cap as a way to cut oil revenues for Russia, a major source of its funding for its war against Ukraine, while keeping Russian oil flowing and avoiding price spikes.
The actual price will be set in the coming weeks ahead of the planned Dec. 5 launch of a European embargo on Russian oil and associated restrictions on transportation and insurance of seaborne oil.
A senior Biden administration official said reports of any price range were wrong but declined to elaborate.
World Bank projects energy prices to decline 11 percent in 2023
The World Bank on Wednesday said it expects energy prices to decline 11 percent in 2023 after a 60 percent surge in 2022, with slower global growth and continued COVID restrictions in China posing key downside risks.
The bank in its latest Commodity Markets Outlook projected a Brent crude average price of $92 a barrel in 2023, easing to $80 in 2024 but well above the five-year average of $60.
It said Russia’s oil exports could drop by as much as 2 million barrels per day due to an EU embargo and restrictions on insurance and shipping.
A proposed Group of Seven oil price cap could affect the flow of oil from Russia, but needed the participation of large emerging markets, and developing economies to be effective, it said.
(With input from Reuters)