Oil steadied in London as financial markets remained on edge while US lawmakers prepared for final negotiations to reach a deal on the debt ceiling.
(Bloomberg) — Oil steadied in London as financial markets remained on edge while US lawmakers prepared for final negotiations to reach a deal on the debt ceiling.
Brent crude traded near $75 a barrel after losing almost 2% over the prior two sessions. President Joe Biden and House Speaker Kevin McCarthy will meet later Monday for talks on averting a catastrophic US default. Oil has fluctuated in recent days on fears they may fail to clinch an agreement.
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The global crude benchmark is down about 5% in May, heading for a fifth straight monthly loss in what would be the worst run since 2017. While leading forecasters like the International Energy Agency expect the market to flip into a sharp deficit, economic concerns in the US and China have made some money managers the most bearish in a decade.
“An evidently tight oil balance is greeted with less than enthusiastic market reaction,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. “Investors’ confidence in a price rally is presently AWOL.”
Prices have also been been weighed down by Russia’s oil exports staying strong despite a pledge to curb production in retaliation for Western sanctions. Refineries in the country have processed less crude this month due to seasonal maintenance, but the drop in supplies to the facilities was too small to provide concrete evidence that Moscow has fully implemented its output cuts.
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