Oil edged higher and stayed on track for a modest weekly gain as investors monitored progress in talks to avoid a US default while the dollar eased.
West Texas Intermediate traded above $72 a barrel after slumping more than three per cent on Thursday. Republican and White House negotiators were moving closer to an agreement to raise the debt limit, according to people familiar with the matter. Still, the details agreed to are tentative and a final accord is not yet at hand.
Supply dynamics remained in focus. Russia’s Deputy Prime Minister Alexander Novak said that OPEC+ wasn’t likely to take further measures at its gathering in Vienna in June, undercutting earlier remarks from Saudi Energy Minister Prince Abdulaziz bin Salman that speculators should “watch out.”
Crude has still sunk about 10 per cent this year as the lackluster economic recovery in top importer China and an aggressive monetary tightening campaign by the US Federal Reserve pressured prices. More US rate increases may be in store, with traders pricing in another quarter-point gain within the next two meetings.
“Macroeconomic concerns are driving oil prices right now more than supply and demand fundamentals,” said Ed Bell, senior director for market economics at Dubai-based lender Emirates NBD PJSC. “We should see averages pulling higher over the remainder of the year provided demand continues to grow and we avoid major recession.” The bank forecasts Brent averaging $95 a barrel in the fourth quarter.
Prices
- WTI for July delivery rose 0.7 per cent to $72.35 a barrel at 11:06 a.m. in London.
- Futures were almost one per cent higher for the week.
- Brent for July settlement added 0.5% to $76.65 a barrel.
The Bloomberg Dollar Spot Index dropped 0.2 per cent, making commodities priced in the US currency cheaper for overseas buyers.
© 2023 Bloomberg L.P.
