ANKARA

Oil prices rose on Friday as investors were encouraged by the declining US dollar, which makes dollar-indexed oil cheaper for them, while the worsening COVID epidemic in China dampened further price upticks.

International benchmark Brent crude traded at $85.59 per barrel at 10.00 a.m. local time (0700GMT), up 0.29% from the closing price of $85.34 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $78.39 per barrel at the same time, a 0.57% gain after the previous session closed at $77.94 a barrel.

Oil prices were on the rise on the last trading day of the week as signals of smaller interest rate hikes by the US Federal Reserve weighed on the dollar.

The US dollar index, which measures the greenback’s value against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, fell 0.04% to 105.72.

"A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate," according to minutes from the Federal Reserve's last monetary policy meeting on Nov. 1-2.

On Nov. 2, the Fed approved a rate hike of 75 basis points for the fourth consecutive time, carrying the target range for the federal funds rate to between 3.75% and 4% – its highest since January 2008, in the middle of the 2007-2008 financial crisis.

However, concerns over worsening COVID-19 conditions in China continue denting sentiment.

The world’s largest oil importer China is struggling with a record-high jump in daily COVID-19 cases, which saw the reintroduction of strict curbs in several major cities, sparking public unrest in Zhengzhou, a city home to the world’s largest iPhone factory.

Supply concerns intensify as EU oil ban on Russia nears

Although it failed to reach a deal to cap prices for Russian seaborne oil, the EU is set to ban Russian oil starting from Dec. 5 and oil products on Feb. 5.

The G-7 countries are also planning to impose a cap on Russian seaborne oil of $65-$70 a barrel.

In a phone call with Iraqi Prime Minister Mohammed Shia Al-Sudani, Russian President Vladimir Putin on Thursday warned of "serious consequences" for the global energy market if the West imposes a price cap on Russian oil.

Both leaders "praised the joint work of Russia and Iraq within OPEC+, which makes it possible to ensure the stability of the world oil market."

Investors are also monitoring an upcoming meeting of OPEC+ on Dec. 4 amid reports that OPEC+ oil producers may consider increasing output by up to 500,000 barrels per day.

However, Saudi Arabia and several other OPEC countries said the group’s output policy would not change.