2023-05-30 21:02:52
Oil prices fell yesterday, before the consideration in Congress of the last-minute agreement reached on Sunday to avoid the default of payment of the United States, the investors preferring to be cautious. In the middle of the day, a barrel of Brent from the North Sea, for delivery in July, lost 2.05% to 75.49 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, dropped 1.95% to 71.25 dollars.
The mood ‘remains cautious to say the least’ in the oil market, according to PVM Energy’s Tamas Varga, following weeks of uncertainty over the hot file of raising the debt ceiling in the United States, which finally concluded in a last-minute deal between President Joe Biden and Republican leader Kevin McCarthy. “The reception of the agreement has been mixed to say the least. The dollar remained strong and oil failed to recover significantly.
A tough battle is now looming in the US Congress, which will examine the agreement, sealed over the weekend, to avoid the United States defaulting on payment. “A possible default would have catastrophic economic repercussions both nationally and globally, which would have a negative impact on oil demand,” Varga said. If “a debt agreement is irrevocably reached and adopted”, oil might recover, he adds.
At the same time, “confusing messages from members of OPEC + (the Organization of the Petroleum Exporting Countries and their allies, editor’s note) regarding new production cuts have sown uncertainty on the markets”, notes Stephen Innes, of SPI AM.
Russian Deputy Prime Minister for Energy Alexander Novak dismissed any recalibration of OPEC+ production in an interview with Russian newspaper Izvestia, contrasting with remarks by Saudi Energy Minister Prince Abdulaziz bin Salman, who asked speculators to “watch out” for the potential consequences. These statements come ahead of the next ministerial meeting on Sunday of OPEC +, of which Saudi Arabia is the de facto leader with Russia.
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, remained stable at 24.91 euros per megawatt hour (MWh), shortly following touching 23.50 euros per MWh, a new low for nearly two years. Gas prices in Europe “continue to fall gradually, because the economic situation, characterized by abundant supply and low consumption, continues to weigh on the market”, recall the analysts of Energi Danmark.
Source: AFP
Oil prices fell yesterday, before the consideration in Congress of the last-minute agreement reached on Sunday to avoid the default of payment of the United States, the investors preferring to be cautious. In the middle of the day, a barrel of Brent from the North Sea, for delivery in July, lost 2.05% to 75.49 dollars. Its American equivalent, the West Texas barrel…
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