SINGAPORE Oil prices went up in Asia on Friday, despite the lack of market liquidity, after a week marked by concerns about Chinese demand and haggling over a Western price cap on Russian oil.
Brent crude futures went up by 28 cents, or 0.33 per cent, to trade at $85.62 a barrel at 0410 GMT.
The U.S. West Texas Intermediate WTI crude futures climbed 49 cents, or 0.49 per cent, from Wednesday's close to $78.43 a barrel. There was no WTI settlement on Thursday due to the U.S. Thanksgiving holiday.
Both contracts were still headed for their third consecutive week decline, and were on track to fall 2 per cent due to concerns about tight supply easing.
In a client note, Stephen Innes, managing partner at SPI Asset Management said that oil is trading slightly higher in highly illiquid holiday-type trading, which is likely to find some support from lower global interest rates.
Russian oil price cap, G 7 and European Union diplomats, have been discussing levels between $65 and $70 a barrel, with the aim of limiting revenue to Moscow's military offensive in Ukraine, without disrupting global oil markets.
The market considers the price caps too high, which reduces the risk of Moscow retaliating, ANZ Research analysts said in a note to clients.
Russian President Vladimir Putin has said Moscow will not supply oil and gas to countries that join in imposing the price cap, which was reiterated on Thursday by the Kremlin.
Trading is expected to remain cautious ahead of an agreement on the price cap, due to come into effect on December 5 when an EU ban on Russian crude kicks off, and ahead of the next meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC on December 4.
In October, OPEC agreed to reduce its output target by 2 million barrels per day through 2023, Saudi Arabian energy minister Prince Abdulaziz bin Salman said this week that OPEC was ready to cut output if needed.
There is growing signs that a surge in COVID 19 cases in China, the world's top oil importer, is beginning to hit fuel demand, with traffic drifting down and implied oil demand around 13 million barrels per day, or 1 million barrels per day, or 1 million barrels per day lower than average, according to an ANZ note.
China reported a new daily record for COVID 19 infections, as cities across the country continued to enforce mobility measures and other measures to control outbreaks.
ANZ said in a separate commodity note that this is a negative backdrop for oil prices as a result of weakness in the U.S. dollar.