Oil prices weighed down by OPEC+ uncertainty, US debt ceiling worries

May 26, 2023 (MLN): Oil prices softened in the early Asia trading session on Friday, amid mixed signals from Russia and Saudi Arabia ahead of the upcoming OPEC+ policy meeting, on top of the stronger dollar.

Brent crude is currently trading at $76.17 per barrel, up by 0.29% on the day.

While West Texas Intermediate crude (WTI) is standing at $71.96 per barrel, up by 0.26% on the day.

Notably, both benchmarks fell sharply yesterday, with Brent crude and WTI dropping by 2.81% and 3.2% respectively.

This drop came as Russian Deputy Prime Minister Alexander Novak said he expected no new steps from the OPEC+ group of oil producers at its meeting in Vienna on June 4.

Market participants reacted this way as the group had previously announced a significant output cut earlier this year.

Moreover, Investors are remaining cautious as the debt ceiling has still not been finalized after the talks on Thursday, and the clock is ticking with less than a week left before June 1.

However, some progress has been made on the debt ceiling, Democratic President Joe Biden and top congressional Republican Kevin McCarthy called the talks productive that were held on Wednesday.

McCarthy stated yesterday that negotiators have made some progress on the debt ceiling.

However, the downside is capped to an extent due to the gain in oil prices can also be attributed to increase in U.S. gasoline futures in the previous trading session ahead of the Memorial Day holiday on May 29 which usually signals the beginning of the high summer fuel demand season.

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