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.

NEWS

Oil slips as U.S. debt caution offset supply concerns

By Florence Tan

SINGAPORE (Reuters) -Oil prices slipped on Monday as caution around the U.S. debt ceiling talks and concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers.

Brent crude futures fell 48 cents, or 0.6%, to $75.10 a barrel by 0201 GMT while U.S. West Texas Intermediate (WTI) crude for July delivery, the more actively traded contract, fell 45 cents, or 0.6%, to $71.24.

The June WTI contract, which expires later on Monday, fell 52 cents to $71.03 a barrel.

The resumption of U.S. debt ceiling negotiations later on Monday will remain a key driver for crude and risk sentiment this week, IG’s Sydney-based analyst Tony Sycamore said. The U.S. is the world’s biggest oil consumer.

Investors were also concerned that China’s recovery is faltering after weak economic data reports in the past two weeks, he added.

If the housing market continues to fall and policymakers fail to respond, the risk of a double-dip China slowdown increases, which spells bad news for crude oil consumption and demand,” Sycamore said. China is the world’s top crude importer and No. 2 oil consumer.

Last week, both oil benchmarks gained about 2%, their first weekly gain in five, after wildfires shut in large amounts of crude supply in Alberta, Canada.

The impact of voluntary production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, is also being felt after going into effect this month, analysts from Goldman Sachs and JP Morgan said.

Total exports of crude and oil products from the group plunged by 1.7 million barrels per day (bpd) by May 16, JP Morgan said, adding that Russian oil exports will likely fall by late May.

On Saturday, the Group of Seven (G7) nations pledged at its annual leaders’ meeting to enhance efforts to counter Russia’s evasion of the price caps on its oil and fuel exports “while avoiding spillover effects and maintaining global energy supply”, but did not provide details.

Such enhancements are not expected to change the supply situation for crude and oil products, the International Energy Agency’s (IEA) Executive Director Fatih Birol said, adding that the agency was sticking to its analysis for now.

In its latest monthly report, the IEA warned of a looming shortage in the second half when demand is expected to eclipse supply by almost 2 million bpd.

It remains to be seen if the new curbs will impact Russian oil production as the Russians have been very effective in finding ways around European and U.S. sanctions and the sanctions have proved difficult to enforce,” Sycamore said.

The U.S. oil rig count fell by 11 to 575 in the week to May 19, the biggest weekly drop since September 2021, energy services firm Baker Hughes Co said. [RIG/U]

“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizeable deficit over the second half of this year,” ING said.

(Reporting by Florence Tan; Editing by Himani Sarkar and Christian Schmollinger)

 

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