Brent crude futures were up 37 cents, or 0.4%, at $87.25 per barrel by 1441 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 55 cents, or 0.7%, to $81.77 per barrel.
Both contracts dipped in an out of negative territory, but, but were on track for their first weekly gains, the biggest in two months at around 4% and 7% respectively, after three consecutive weeks of drops.
European Union governments tentatively agreed on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters.
The cap, which was designed to limit revenues to Russia while not resulting in an oil price spike, still needs formal approval before the bloc’s sanctions on Russian crude kick in on December 5. Russian Urals crude traded at around $70 a barrel on Thursday afternoon.
Russian oil output could fall by 500,000 to 1 million barrels per day (bpd) early in 2023 due to the EU ban on seaborne imports from Monday, two sources at major Russian producers said.
OPEC+ is widely expected to stick to its latest target of reducing oil production by 2 million barrels per day (bpd) when it meets on Sunday, but some analysts believe that crude prices could fall if the group does not make further cuts.
“Crude carries significantly more weekend risk and could be extremely volatile on the open next week,” said Oanda analyst Craig Erlam, a view echoed by other analysts.
Sending bullish signals, China is set to announce an easing of its COVID-19 quarantine protocols within days, sources told Reuters, which would be a major shift in policy in the world’s second biggest oil consumer, although analysts warn a significant economic reopening is likely to be months away.
Also underpinning oil prices, the U.S. dollar, which typically trades inversely with oil, hit five-month lows.