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

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

/ 09:57 AM May 31, 2023

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.

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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.

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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

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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.

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

TAGS: Congress, debt ceiling, oil prices, U.S.

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