HOUSTON: Oil prices rose 1% on Friday as U.S. officials appeared close to striking a debt ceiling deal, and as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting.
Brent crude was up 78 cents, or 1%, at $77.04 a barrel at 11:37 a.m. ET (1537 GMT). U.S. West Texas Intermediate rose 89 cents, or 1.2%, to $72.74 a barrel.
Benchmarks had settled more than $2 per barrel lower on Thursday after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting in Vienna on June 4.
Both prices were still poised to post a second week of gains. A deal to raise the U.S. debt ceiling, which appears in sight, would likely boost oil prices.
Wall Street’s main indexes also rose over progress in negotiations on raising the U.S. debt ceiling.
Russia is leaning towards leaving oil production volumes unchanged ahead of an OPEC+ policy meeting on June 4 because Moscow is content with current prices and output, three sources with knowledge of current Russian thinking told Reuters.
Oil prices gain 1pc on falling US stockpiles
That contrasted with hints of possible output cuts this week from Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, de-facto leader of the Organization of Petroleum Exporting Countries (OPEC), who warned short sellers to “watch out”.
“I think we all are on guard here ahead of next week’s OPEC meeting,” said John Kilduff, partner at Again Capital.
While there is sense that the White House and congressional Republicans would reach a deal to raise the U.S. government’s $31.4 trillion debt ceiling, it could take another day or at least several more hours, Kilduff added.
Bets on falling oil prices are on the rise ahead of the next OPEC+ policy meeting on June 4.
Demand for gasoline is expected to remain strong with motorist group AAA predicting the May 27-29 U.S. Memorial Day holiday weekend will be the third-busiest for auto travel since 2000.
However, worries of weak global demand growth capped gains.
Slowing economic growth and sticky inflation in Europe has held back price gains with the Dutch Central Bank chief Klaas Knot saying the European Central Bank needs at least two more 25-basis-point interest rate hikes.
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