May 30, 2023 (MLN): Oil prices declined on Tuesday, losing earlier gains after a tentative debt ceiling deal was finally reached, possibly averting a default, on top of mixed messages from major producers clouding the supply outlook.
Brent crude is currently trading at $76.49 per barrel, down by 0.83% on the day.
While West Texas Intermediate crude (WTI) is standing at $72.22 per barrel, down by 0.91 % on the day.
President Joe Biden and Republican House of Representatives Speaker McCarthy finally reached a tentative deal to suspend the federal government’s $31.4 trillion debt ceiling on Saturday evening, ending a months-long stalemate.
Certain lawmakers stated on Monday that the deal to raise the debt ceiling might be opposed, however, Joe Biden and McCarthy remained confident that the deal would pass.
Priyanka Sachdeva, a market analyst at Phillip Nova said that "(The) contradictory statements from Republicans and lawmakers are keeping investors largely invested in the stand-off," as reported by Reuters.
Coincidently, at the time of the debt deadline, there is also a meeting scheduled with the Organization of the Petroleum Exporting Countries and allies (OPEC+).
The market is concerned over the decision of OPEC+ to increase the output cuts of the commodity.
Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, said "Investors have shifted their attention to the outcome of the OPEC+ meeting this weekend as there have been mixed messages from major oil producers,",
Saudi Arabia and other members of OPEC+ announced further oil output cuts of around 1.2 million barrels per day (bpd) in April.
Chinese manufacturing and service sector data due later this week will also be scrutinized for cues on the fuel demand recovery in the world's top oil importer.
Notably, both oil benchmarks marked a rise of 2.03% and 1.39% respectively in the prior week.
Copyright Mettis Link News
Posted on: 2023-05-30T11:44:34+05:00
