Oil climbs on US debt ceiling clarity

Following debt bill approval by the US Senate, Washington staves off potential disaster, sending oil prices up. 
Photo: Nick Oxford/Reuters/Ritzau Scanpix
Photo: Nick Oxford/Reuters/Ritzau Scanpix

Oil prices climbs on Friday, following a decision to suspend US debt default.

A barrel of Brent crude go for USD 74.77 on Friday morning, up from USD 73.17 on Thursday afternoon. Simultaneously, US West Texas Intermediate trades at USD 70.55, up from USD 68.87.

Markets were reassured by the US Senate’s approval to suspend the US debt ceiling – President Biden’s signature is all that is needed for the bill to become law.

Earlier signals of an interest rate pause also helped calm markets.

On Thursday, the EU Energy Information Administrations released crude stock data indicating that crude import flows increased last week. According to Reuters, the data underpinned positive market sentiment.

Investors await the result of a meeting in the Organization of Petroleum Exporting Countries and allies, OPEC+, on June 4. Delegates from the key oil-producing countries will decide on whether to subject production output to further cuts.

”Oil prices are stabilizing after a round of disappointing global manufacturing data supported the case for OPEC+ to deliver another production cut,” says Edward Moya, a senior market analyst at OANDA, to Reuters.

The US Institute for Supply Management said on Thursday that manufacturing PMI fell to 49.9 in May, down from April’s 47.1, making May the seventh consecutive months below the 50-threshold.

Mixed development from key Chinese manufacturing data came out this week. Factory activity in May had slumped to its lowest levels in five months, contrasted by stronger-than-expected PMI.

English edit: Simon Øst Vejbæk

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