Ammon News - Oil prices climbed in early trading on Tuesday to their highest in three weeks as China's easing of Covid-19 restrictions boosted optimism of a rebound in demand in the world's biggest importer of crude.

Brent, the benchmark for two thirds of the world’s oil, was 0.89 per cent higher at $84.67 a barrel at 9.41am UAE time while West Texas Intermediate, the gauge that tracks US crude, was up 0.90 per cent at $80.28 a barrel.

Both benchmarks rallied last week, posting their biggest weekly gains since October at the close of trade on Friday after Russia's RIA news agency quoted Deputy Prime Minister Alexander Novak as saying Moscow could cut its oil output by 500,000 barrels per day to 700,000 bpd in early 2023 as it responds to a price cap on its crude and oil products.

Brent was 3.63 per cent higher at the end of trade on Friday while WTI was up 2.67 per cent.

On Monday, China's National Health Commission said it would end its quarantine requirements for inbound travellers from January 8. The measures have been in place since the start of the pandemic.

Oil futures have also gained on the back of a weakening US dollar, which makes fuel cheaper for holders of other currencies.

The US Dollar Index, a measure of the value of the greenback against a weighted basket of major currencies, was down more than 0.17 per cent at 104.14 on Tuesday at 7.47am UAE time.

The index, which hit a two-decade high of 111.80 in September, has fallen by about 8.74 per cent over the past three months amid signs of slowing inflation.