2023-05-30 03:18:39
Oil prices
Oil prices rose in early Asian trading, on Tuesday, amid expectations that the debt ceiling agreement in the United States, the largest oil consumer in the world, will increase demand for crude.
But fears of an increase in interest rates and that OPEC + will leave production quotas unchanged limited the gains.
price move
Brent crude futures rose 16 cents, or 0.2 percent, to $77.23 a barrel by 0300 GMT, following rising 12 cents on Monday.
US West Texas Intermediate crude rose 31 cents to $72.99 a barrel, up 0.44 percent, according to Archyde.com data.
While the debt ceiling agreement has spurred buying of riskier assets such as commodities, major oil producers will meet on June 4th with no clarity on whether to deepen production cuts amid the general slump in prices since mid-April.
In addition, US interest rates are expected to rise further, which may hamper economic growth and thus demand for oil.
Al-Bazarkan: Oil prices will fluctuate in the coming period
“Investors have shifted their attention to the outcome of the OPEC+ meeting early next week amid conflicting messages from major oil producers,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“The US debt ceiling agreement has boosted risk appetite, but investors are reluctant to increase buying amid concerns regarding inflation and the possibility of further interest rate increases,” he added.
US President Joe Biden and House Speaker Kevin McCarthy reached an agreement over the weekend to suspend the $31.4 trillion debt ceiling and limit government spending for the next two years.
Investors are also watching closely whether the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, in what is known as OPEC +, will change their production quotas.
And in April, Saudi Arabia and other members of OPEC + announced more voluntary cuts in oil production by regarding 1.2 million barrels per day, bringing the total volume of the bloc’s cuts to 3.66 million barrels per day, according to Archyde.com calculations.
Al-Bazarkan: OPEC + decisions are necessary for the balance of oil markets
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