Monday, 17 June 2024

Oil prices rise as US Congress passed debt ceiling bill


Oil prices rose today, Friday, amid a recovery in sentiment as a result of the approval of the US debt ceiling bill and at a time when markets assessed the possibility of OPEC + implementing a cut in production to support prices in the next two days.

According to “Reuters”, Brent crude futures rose 71 cents, or 0.96 percent, to $ 74.99 a barrel, by 0600 GMT, and West Texas Intermediate crude futures rose 66 cents, or 0.94 percent, to $ 70.76 a barrel. Oil prices, two consecutive days of losses…

The markets received reassurance after the approval of a bill in Congress suspending the US debt ceiling of $ 31.4 trillion, in addition to indications earlier that the Federal Reserve (the US central bank) might stop raising interest rates.

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On Thursday evening local time, the US Senate passed the debt ceiling bill, averting a catastrophic debt default that would have jolted the financial markets.

Market sentiment also received support from US crude inventories data released on Thursday by the Energy Information Administration, which indicated a jump in crude imports last week.

Investors’ focus has shifted to a meeting on June 4 of the Organization of the Petroleum Exporting Countries and its allies, including Russia, an alliance known as OPEC +.

During the meeting, ministers from the major oil-producing countries will decide on further possible production cuts to support government revenues.

Expectations and indicators varied regarding such a possible cut, as Reuters and analysts from banks, including HSBC and Goldman Sachs, stated that it is unlikely that further production cuts will be implemented from OPEC +, and that the alliance will adopt a wait-and-see approach.

However, other market observers indicated that weak data for the manufacturing sector from China and the United States may suggest that OPEC + will take a decision to cut further.