RIYADH: Oil prices rose by over 2 percent on Wednesday on signs of tighter supply, a weaker dollar and optimism over a Chinese demand recovery.

Brent crude futures LCOc1 rose $2.23, or 2.69 percent to $85.26 per barrel at 02.15 p.m Saudi time. 

US West Texas Intermediate crude CLc1 futures climbed $1.95, or 2.49 percent, to $80.15.

Venezuela to sign new contracts to boost oil output at joint ventures 

Venezuela will soon sign new contracts to boost oil joint ventures between state firm PDVSA and private energy companies, the country’s Oil Minister Tareck El Aissami said on Tuesday, a move that will benefit Chevron Corp.  

The US Treasury Department on Saturday authorized the No. 2 US oil producer to expand operations at its Venezuela joint ventures. That authorization is expected to help the country grow crude production and exports following almost four years of harsh US oil trading sanctions. 

US President Joe Biden’s administration has said sanctions on Venezuela could be eased further depending on the progress of key political talks that resumed this month in Mexico aimed at agreeing to a presidential election and other demands. 

El Aissami made the announcement on Twitter following a meeting with Chevron’s top executive in Venezuela, Javier La Rosa. Chevron was authorized earlier this year by Washington to meet Venezuelan officials, including those individually sanctioned like El Aissami. 

“It is a regular practice for Chevron Venezuela leadership to meet with authorized PDVSA and government representatives in relation to the activities that the company is authorized to undertake in the country,” Chevron said in a statement.  

Chevron is a minority partner in four oil joint ventures in Venezuela with PDVSA, which have produced this year between 60,000 and 100,000 barrels per day of crude. The new license authorizes the US company to export its projects’ oil to the US.  

Iraq plans to raise oil exports by 250,000 bpd in 2023 

Iraq has plans to raise oil exports by 250,000 barrels per day in the second half of next year to reach 3.6 million bpd from the current 3.35 million bpd, Iraq’s state news agency quoted Saadoun Mohsen, a senior official at the country’s state oil marketer SOMO, as saying on Tuesday. 

EU inches toward deal on Russian oil price cap this week 

EU countries are inching toward a deal this week on a price cap on Russian oil, a way to adjust the cap in future, and on linking it to a package of new sanctions against Moscow over its invasion of Ukraine, diplomats said on Tuesday. 

The deadline for a deal is Dec. 5 because that is when the EU’s own full embargo on purchases of Russian seaborne oil, agreed upon at the end of May, kicks in. 

The price cap, a softer measure proposed by the Group of Seven nations, is supposed to replace the tougher EU plan to protect global supply and prevent a price surge, but there is disagreement among the 27 EU countries on the level of the cap. 

“Consultations have been ongoing since last Wednesday and we are inching toward an agreement, we are closer and closer,” Reuters reported quoting one senior EU diplomat involved in the negotiations.  

The G7 proposal, presented to EU governments by the European Commission, was a price cap in the range of $65-70 per barrel — a level that diplomats said was fixed in September when Russian oil traded at $68-76 per barrel on the market. 

“The idea was that a cap of around 5 percent below the market price would work to make the Russians sell while reducing their revenues,” a second senior diplomat said. “But since then prices have kept falling and are now below the cap level, so that level achieves no objective,” he said. 

Poland, Lithuania and Estonia, therefore, rejected the G7 proposal saying the cap should be closer to Russian production costs, which are estimated at about $20-25 per barrel. The three countries, which all border Russia, back a $30 price cap. 

They also argued that, given changing global oil markets and Russia’s ability to finance the war, the price cap should not be set in stone, but be a dynamic tool that could be reviewed often under a mechanism yet to be agreed. 

(With input from Reuters)