By Adedapo Adesanya
Oil ticked up on Friday as officials in the United States appeared close to striking a debt ceiling deal before a June deadline.
Brent crude settled 69 cents or 0.9 per cent higher at $76.95 a barrel, while the US West Texas Intermediate closed up by 84 cents or 1.2 per cent to $72.67 a barrel during the session.
On a weekly basis, both benchmarks posted a second week of gains, with Brent climbing 1.7 per cent and WTI appreciating by 1.6 per cent.
It is possible negotiators will reach a deal to raise the US government’s $31.4 trillion debt ceiling with the possibility that talks could easily spill over into the weekend, a Biden administration official said.
Democratic and Republican negotiators on Friday got more time to reach a deal to raise the US government’s $31.4 trillion debt ceiling, as Treasury Secretary Janet Yellen said the government was likely to run out of money to pay its bills on June 5, four days later than she previously predicted.
Ms Yellen’s announcement gives a bit more room for Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy to reach an accord to raise the federal government’s self-imposed borrowing limit and avert a potentially disastrous default.
Negotiators appear to be nearing a deal to lift the limit for two years but remain at odds over whether to stiffen work requirements for some anti-poverty programmes.
Supply dynamics remain in focus, with Saudi Arabia and Russia offering conflicting statements on the potential for more cuts from the Organisation of the Petroleum Exporting Countries, OPEC and its allies, OPEC+
Russian Deputy Prime Minister Alexander Novak said that OPEC+ wasn’t likely to take further measures at its gathering in Vienna in June.
His view contrasts that of Saudi Energy Minister Prince Abdulaziz bin Salman, whose remarks earlier in the week indicated that speculators should “watch out.”
Meanwhile, US demand for gasoline (petrol) is expected to remain strong, with predictions that the May 27-29 Memorial Day holiday weekend will be the third-busiest for auto travel since 2000.
On the supply side, US oil rigs fell five to 570 this week, according to a report from energy services firm Baker Hughes Co. In May, the oil count fell by 21 rigs, which was the biggest monthly drop since June 2020.
However, slowing economic growth and sticky inflation in Europe has capped price gains.
The Dutch Central Bank chief Klaas Knot said the European Central Bank (ECB) needs at least two more 25-basis-point interest rate hikes.
Dipo Olowookere