Oil Prices Rise Over 2% After US Congress Approves Debt Ceiling Agreement and Positive Job Data; Focus Shifts to OPEC+ Meeting on June 4th

Oil prices rose more than 2 percent on Friday, supported by the US Congress’ approval of a debt ceiling agreement that prevents the government in the world’s largest oil consumer from defaulting on its debt, as well as the publication of job data that raised hopes of a possible halt to raising interest rates in the United States.

The focus now turns to the OPEC+ meeting on June 4th.

Brent crude futures rose $1.85, or 2.5%, to $76.13 a barrel upon settlement, and US West Texas Intermediate crude futures rose $1.64, or 2.3%, to $71.74 upon settlement.

The US Senate passed the debt ceiling bill on Thursday evening, averting a catastrophic debt default that would have jolted the financial markets.

And US employment increased more than expected in May, but the decrease in the rise in wages may allow the US Central Bank to skip an expected hike in interest rates this month for the first time in more than a year, which may support the demand for oil.

Oil traders will be watching the June 4th meeting of the OPEC+ alliance, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia.

The group had announced in April a sudden production cut of 1.16 million barrels per day, but the price gains resulting from the reduction have faded and crude oil is currently trading below pre-cut levels.

Two sources in OPEC + told Reuters that the alliance is discussing possible options for its next meeting, including the possibility of announcing an additional cut of about one million barrels per day.

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2023-06-02 22:11:49
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