America’s approach to reaching an agreement on the government debt ceiling supports prices
Oil prices rose in Friday’s session, as US officials seem close to reaching an agreement on the government’s debt ceiling, and while the market evaluates the mixed messages about supplies from Saudi Arabia and Russia ahead of the next meeting of the “OPEC +” alliance on production policy.
Brent crude rose 69 cents, or 0.9%, to settle at $76.95 a barrel, and US West Texas Intermediate crude rose 84 cents, or 1.2%, to $72.67 a barrel.
On a weekly basis, the two benchmarks recorded gains for the second week in a row, amounting to 1.7% for Brent and 1.6% for WTI.
However, markets remain cautious as talks to raise the debt ceiling are likely to extend, and there have been new concerns about a possible increase in interest rates by the Federal Reserve (the US central bank) next month that would reduce demand after a strong reading of consumer spending and inflation in the United States.
An official in US President Joe Biden’s administration said that while negotiators could reach an agreement to raise the US government’s debt ceiling of $31.4 trillion, the talks could extend over the weekend.
The two benchmarks fell more than $2 a barrel when settling in Thursday’s session, after Russian Deputy Prime Minister Alexander Novak played down the chances of approving a new production cut at the “OPEC +” meeting in Vienna on June 4.
Three informed sources told Reuters that Russia tends to keep oil production volumes unchanged because Moscow is satisfied with current price and production levels.
This contradicts the hints of Saudi Energy Minister Prince Abdulaziz bin Salman, who said earlier that “speculators should beware.”
2023-05-27 06:15:00
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