Last updated: May 29, 2023, 5:20 AM IST
Washington DC, United States of America (USA)
US energy companies scrapped rigs for the fourth week in a row, with the number of rigs falling by five last week to 570, the lowest level since May 2022. (Image: Reuters file)
Brent crude oil futures rose 39 cents, or 0.5%, to $77.34 a barrel by 2317 GMT, while US West Texas Intermediate crude was priced at $73.12 a barrel
Oil prices rose in early Asian trading on Monday after US leaders reached a tentative deal on the debt ceiling, potentially staving off the bankruptcy of the world’s largest economy and oil consumer.
Brent crude oil futures rose 39 cents, or 0.5%, to $77.34 a barrel in 2317 GMT, while US West Texas Intermediate crude was at $73.12 a barrel, up 45 cents or 0.6%.
US President Joe Biden and Speaker of the House of Representatives Kevin McCarthy reached an agreement in principle on Saturday to suspend the $31.4 trillion debt ceiling. Both leaders expressed confidence on Sunday that members of the Democratic and Republican parties will vote in favor of the deal.
The relief for global financial markets may be short-lived, however, as once the deal is approved, the US Treasury Department is expected to issue bonds that will further tighten liquidity and make financing more expensive for companies already reeling of high interest rates.
Last week, Brent and WTI posted a second straight weekly gain of more than 1% on the progress of US debt ceiling talks and after the Saudi energy minister warned that short sellers are betting oil prices will fall to “watch out” for pain.
Some investors are taking the warning as a signal that OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, could consider further production cuts at a meeting on June 4.
However, Russian Deputy Prime Minister Alexander Novak said last week that he did not expect any further steps from OPEC+ as a decision on voluntary production cuts was made a month ago.
U.S. energy companies scrapped rigs for the fourth week in a row, with five rigs last week dropping five to 570 to the lowest level since May 2022, energy services firm Baker Hughes Co said in its weekly report on Friday.
Investors will be watching Chinese manufacturing and services data this week and US nonfarm wage data on Friday for signs of economic growth and oil demand.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – Reuters)