TOKYO- Oil prices rose on Tuesday as the expectations the debt ceiling deal in US the world’s biggest oil user, will spur more demand but fears of further interest rate rises and that OPEC+ will leave output quotas unchanged capped gains.
Brent crude futures climbed 35 cents, or 0.5 percent, to $77.42 a barrel after gaining 12 cents on Monday.
US West Texas Intermediate (WTI) crude rose 53 cents to $73.20 a barrel, up 0.7 percent from Friday’s close. There was no settlement on Monday because of a US public holiday.
While the debt ceiling deal has spurred buying in riskier assets such as commodities, major oil producers will meet on June 4 and it is unclear whether they might increase their output cuts amid an overall slump in prices since the middle of April. Additionally, expectations are for US interest rates to rise further, potentially crimping economic growth and therefore oil demand.
“Investors have shifted their attention to the outcome of the OPEC+ meeting this weekend as there have been mixed messages from major oil producers,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
“A US debt ceiling deal boosted risk appetite, but investors are reluctant to step up buying amid worries over inflation and potential further increases of interest rates,” he said.
US President Joe Biden and House of Representatives Speaker Kevin McCarthy over the weekend forged an agreement to suspend the $31.4 trillion debt ceiling and cap government spending for the next two years. – Reuters
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