Oil shoots up 5% due to the fall of the dollar and the prohibition of the European Union

Oil rose more than 5% on Friday, amid uncertainty over future interest rate hikes from the Federal Reserve, while the looming ban on the European Union on Russian crude and the possibility of China relaxing some restrictions due to Covid-19 supported the markets.

While fears of a global recession capped gains, crude oil futures Brent they rose $3.99 to $98.57 a barrel, marking a weekly gain of more than 2.9 percent. US crude oil futures West Texas Intermediate (WTI) they added $4.44, or 5.04%, to $92.61 to close the week with a 4.7 percent gain.

Both contracts were favored by the weakness of the dollarwhich can boost demand for oil because it makes the commodity cheaper for those holding other currencies.

Although demand concerns weighed on the market, supply is expected to remain tight due to Europe’s planned embargoes on the russian oil and the fall of crude oil reserves in United States.

“Slight dollar weakness and the upcoming Russian oil sales ban are certainly supportive as attention is shifting from recession fears to supply issues,” PVM Oil Associates analyst Tamas Varga said. .

“The main catalyst, however, is reports that China could ease its zero Covid-19 restrictions, which would be a boost for its economy and for oil demand.”

The EU ban on imports of Russian crude will take effect from December 5. Details of the G7 price cap intended to ease restrictions on Russian flows outside the EU are still being debated.

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