London: Oil prices rose on Monday following an agreement by the G7 group of
nations and its allies to cap the price of Russian oil at $60 a barrel, BBC reported.
Brent crude added around 1 per cent to above $86 in Asia trading.
The move – which could come into force on Monday – raises Western pressure on Russia over the invasion of Ukraine.
It comes after oil producers’ group Opec+ agreed to stick to its policy to reduce production, amid slower global growth and higher interest rates, BBC reported.
“This decision by Opec+ to keep the quota where it is… is by itself an implicit sort of support to the oil market,” Kang Wu of S&P Global Commodity Insights told the BBC.
Opec+ is a group of 23 oil-exporting countries, including Russia, which meets regularly to decide how much crude oil to sell on the world market.
Traders are also reacting to strong US jobs data and the easing of Covid restrictions in some Chinese cities.
More cities in China, including Urumqi in the north west, have said they will loosen curbs after mass protests against the country’s zero-Covid policy.
“Belief that China may accelerate reopening plans has triggered some early morning optimism,” said Stephen Innes, managing partner at SPI Asset Management.
But he cautioned against “chasing oil higher with China’s reopening as there will be a massive surge in Omicron cases, that could keep mobility on the downswing at least through the first quarter of next year”.
In a joint statement last week, the G7 and Australia said the $60 cap on Russian oil would come into force on Monday or “very soon thereafter”, BBC reported.