Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


Oil gains after US leaders strike debt deal

Oil gains after US leaders strike debt deal

By Florence Tan and Mohi Narayan

(Reuters) -Oil prices rose on Monday after U.S. leaders reached a tentative debt ceiling deal, possibly averting a default in the world’s largest economy and oil consumer, although concerns about further interest rate hikes capped gains.

Brent crude futures climbed 45 cents, or 0.6%, to $77.40 a barrel by 0636 GMT, while U.S. West Texas Intermediate crude was at $73.2 a barrel, up 53 cents, or 0.7%. Trade is expected to be subdued on Monday because of UK and U.S. holidays.

U.S. President Joe Biden and House Speaker Kevin McCarthy on the weekend forged an agreement to suspend the $31.4 trillion debt ceiling and cap government spending for the next two years. Both leaders expressed confidence that members of the Democratic and Republican parties will vote to support the deal.

Reaching the deal and coming closer to avoiding a default on U.S. debt renewed investor appetite for riskier assets such as commodities.

Analysts said the provisional deal has taken pressure off the markets, offering a relief rally in risk assets, including crude oil.

We could see more gains as a relief rally gets under way in the broader financial markets when the U.S. comes back from the long Memorial Day weekend,” Vandana Hari, founder of oil market analysis provider Vanda Insights, said.

Last week, Brent and WTI rose by more than 1%, gaining for a second week.

Prices gained as the U.S. debt ceiling talks showed progress and after Saudi energy minister Abdulaziz bin Salman warned short-sellers betting that oil prices will fall to “watch out” for pain.

Bin Salman’s warning was seen as a signal that the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, may further cut output when they meet on June 4.

However, comments from Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate the world’s third-largest oil producer is leaning toward leaving output unchanged.

Analysts see the boost in oil prices from the debt deal as short-lived.

The rally’s sustainability is questionable as there is a higher chance the U.S. Federal Reserve will raise interest rates in June after their preferred inflation metric rose more than expected for April, IG’s Sydney-based analyst Tony Sycamore said.

“Higher U.S. rates are a headwind for crude oil demand,” he added.

Investors will be watching for manufacturing and services data in China, the world’s biggest oil importer, this week as well as U.S. nonfarm payroll data on Friday for signals on economic growth and oil demand.

Future oil output growth in the U.S., the world’s biggest producer, also may slow as energy firms cut rigs for a fourth week. The number of oil rigs operating fell by five to 570 last week to their lowest since May 2022, energy services firm Baker Hughes Co said in its weekly report on Friday.

(Reporting by Florence Tan in Singapore and Mohi Narayan in New Delhi; Editing Christian Schmollinger and Jacqueline Wong)


Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts