Oil edges up after steep losses ahead of US debt ceiling vote

Oil prices edged up on Wednesday after steep losses in the prior session, as market participants awaited an expected vote on a bipartisan deal to lift the $31.4 trillion U.S. debt ceiling.

Brent crude futures for August delivery rose 11 cents to $73.82 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude (WTI) gained 8 cents to $69.54 a barrel. Both fell more than 4 percent on Tuesday.

Brent’s July contract, which expires on Wednesday, and the U.S. benchmark were on track for monthly declines of more than 7 percent and 9 percent, respectively.

Top congressional Republican Kevin McCarthy on Tuesday urged members of his party to support the deal even as he faced a direct challenge from some, which weighed on oil prices during the previous session.

https://business.inquirer.net/403482/legislation-to-suspend-us-debt-limit-advances-to-full-house-of-representatives

Still, a key party hardliner said he would likely support the measure in a critical procedural vote, which would allow it to clear a pivotal House of Representatives Rules Committee with a Republican majority. The committee was due to vote later on whether to advance the 99-page bill.

The debt deadline nearly coincides with the June 4 meeting of OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia. Traders were uncertain about whether the group will increase output cuts as a slump in prices weighs on the market.

Saudi Arabian Energy Minister Abdulaziz bin Salman last week warned short-sellers betting oil prices would fall to “watch out” in a possible signal that OPEC+ may cut output.

However, comments from Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate the world’s third-largest oil producer is leaning toward leaving output unchanged.

https://business.inquirer.net/402632/russias-novak-does-not-expect-new-steps-from-opec-meeting

In April, Saudi Arabia and other members of OPEC+ announced further oil output cuts of around 1.2 million barrels per day (bpd), bringing the total volume of cuts by OPEC+ to 3.66 million bpd, according to Reuters calculations.

Market participants also awaited industry data on U.S. crude stockpiles due later on Wednesday. The data was delayed by a day because of a U.S. holiday earlier this week.

Seven analysts polled by Reuters estimated on average that crude inventories fell by about 1.2 million barrels in the week to May 26.