Discussions about the price cap for Russian oil support the black gold price

At the auctions on Friday, oil prices rose and trimmed some of the weekly losses. The losses were driven by concerns about demand from China and expectations of a high price cap on Russian oil planned by the G7. The concerns and expectations described above will keep supply flowing.

Reuters reports that G7 and European Union diplomats are discussing a cap on Russian oil prices between $65 to $70 per barrel.

In a note to clients, analysts at ANZ Research said the risk of a Russian retaliation is waning as the market sees the price cap as too high.

ANZ also said there were signs that a surge in COVID-19 cases in China was affecting oil demand.

Separate ANZ commodity notes say that the current situation in China, as well as the weakness of the US Dollar, create a negative background for Russian oil prices.

Trading is expected to remain cautious both ahead of the price cap agreement, due to come into effect on December 5, and ahead of the next OPEC+ meeting on December 4.