Oil Prices || تیل کی قیمتیں increased on Monday as U.S. officials negotiated a tentative debt ceiling agreement, perhaps preventing a default in the largest economy and greatest user of oil. However, gains were limited by worries about future interest rate increases.
By 0247 GMT, Brent crude futures were up 66 cents, or 0.9%, to $77.61 per barrel, while U.S. West Texas Intermediate crude was up 75 cents, or 1%, to $73.42 per barrel. Due to UK and US vacations, trade is anticipated to be muted on Monday.
On Saturday, U.S. President Joe Biden and House Speaker Kevin McCarthy reached an agreement in principle to suspend the $31.4 trillion debt ceiling and impose spending limits on the government for the following two years. On Sunday, both leaders expressed optimism that Democrats and Republicans will approve the agreement in the Senate.
Deal-making and the prospect of avoiding a default on U.S. debt increased investor interest in risky assets like commodities. According to Tina Teng, a CMC Markets analyst, “the tentative debt deal offered a relief rally in risk assets, including crude oil. Brent and WTI both increased by more than 1% last week, continuing their recent uptrend.
Oil prices rise as the US nears a debt agreement.
Prices increased as the U.S. debt ceiling negotiations made forward and Saudi Energy Minister Abdul-Aziz bin Salman urged short-sellers who were counting on a decline in oil prices to “watch out” for pain.
The admonition from Bin Salman was seen as a signal that the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, will meet on June 4 to talk about further output reductions.
Thoughts from Russian oil officials and sources, such as Deputy Prime Minister Alexander Novak, suggest the third-largest oil producer in the world is inclined to maintain output.
Analysts predict that the debt agreement will only temporarily increase Oil Prices || تیل کی قیمتیں.
The sustainability of the rally is in doubt because there is a greater likelihood that the U.S. Federal Reserve will increase interest rates in June as a result of the fact that their preferred inflation index increased more than anticipated for April, according to Sydney-based IG analyst Tony Sycamore.
“Higher U.S. Rates act as a barrier to demand for crude oil, he added.
Investors will be keeping an eye on Chinese manufacturing and services data this week as well as U.S. nonfarm payroll data on Friday for signs of economic growth and oil demand. The greatest oil importer in the world is China.
According to Teng, the shaky economic recovery in China is having an impact on Oil Prices || تیل کی قیمتیں.
As energy companies remove rigs for a fourth week, future growth in oil production in the United States, the largest producer in the world, may also decrease. The number of active oil rigs dropped by five to 570 last week, marking their lowest level since May 2022, according to energy services company Baker Hughes Co.’s weekly report released on Friday.