Oil prices dip as dollar strengthens, remain on track for weekly rise

Oil prices edged lower in early Asian trade on Friday as the U.S. dollar pared some losses, while easing COVID-19 curbs in two Chinese cities limited losses.

Brent crude futures were down 11 cents or 0.1 percent at $86.77 per barrel by 1:28 GMT, while U.S. West Texas Intermediate (WTI) crude futures lost 14 cents or 0.2 percent to $81.08 per barrel.

The U.S. dollar, which typically trades inversely with oil, edged higher after dipping to 16-week lows against a basket of major currencies following data that showed U.S. consumer spending increased solidly in October.

Still, both benchmarks were on track for their first weekly gains after three consecutive weeks of decline, as COVID-19 curbs were eased in two major Chinese cities.

Guangzhou and Chongqing cities announced an easing of COVID curbs on Wednesday.

Meanwhile, 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 percent below the market price, according to diplomats and a document seen by Reuters.

All EU governments must approve the agreement in a written procedure by Friday. Poland, which had pushed for the cap to be as low as possible, had not confirmed that it would support the deal, an EU diplomat said.