Oil Up Slightly Ahead of Debt Ceiling Talks

Oil markets were little changed with traders avoiding decisive action as US lawmakers prepped for final negotiations on the debt ceiling.

President Joe Biden and House Speaker Kevin McCarthy are set to meet at 5:30 local time Monday for talks on averting a catastrophic US default. West Texas Intermediate’s more actively traded July contract was little changed near $72. 

The “debt drama in Washington” will continue to be the key driver of oil price action as policymakers contend with a hard deadline of June 1, analysts at wholesale-fuel distributor TACenergy wrote in a note to clients.

The global crude benchmark is down about 5% in May, heading for a fifth straight monthly loss in what would be the worst run since 2017. While leading forecasters like the International Energy Agency expect the market to flip into a sharp deficit, economic concerns in the US and China have made some money managers the most bearish in a decade.

Prices have also been weighed down by Russia’s oil exports staying strong despite a pledge to curb production in retaliation for Western sanctions. Refineries in the country have processed less crude this month due to seasonal maintenance, but the drop in supplies to the facilities was too small to provide concrete evidence that Moscow has fully implemented its output cuts.

Prices:

• WTI for June delivery, which expires Monday, rose 44 cents to settle at $71.99 a barrel in New York
  • The more-active July contract was at $72.05
• Brent for July settlement rose 41 cents to $75.99 a barrel.

-With assistance from Sri Taylor.