25-5-2023 (New York) Oil prices experienced a decline in early Asian trading on Thursday as concerns over the possibility of a debt default in the United States weighed against the potential for further production cuts by OPEC+.
Brent crude futures slipped by 5 cents, or 0.1 percent, reaching $78.31 a barrel by 0042 GMT. Meanwhile, U.S. West Texas Intermediate crude (WTI) fell by 16 cents, or 0.2 percent, settling at $74.18.
While some progress has been made, several unresolved issues still persist in U.S. debt ceiling negotiations, stated House Speaker Kevin McCarthy on Thursday, as the deadline to raise the federal government’s borrowing limit of $31.4 trillion draws closer, risking default.
Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy reconvened at the White House on Wednesday in an effort to reach a deal.
The news of Britain’s inflation rate falling by less than expected last month also exerted pressure on oil prices. Official data indicated that the stubbornly high inflation rate in the country raised the likelihood of more interest rate hikes.
In the previous trading session, oil prices received support from a warning issued by Saudi Arabia’s energy minister, cautioning short-sellers who bet on falling oil prices to “watch out” for potential pain.
Some investors interpreted this as a signal that the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively known as OPEC+, could contemplate additional output cuts during their meeting on June 4.
