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Oil changed its trend to decline at the end of trading, Friday, after negotiations to raise the public debt ceiling between Republican members of the US House of Representatives and the administration of President Joe Biden temporarily stopped, which threatens the government’s failure to pay its obligations, which will reduce energy demand.
Nevertheless, the benchmark “Brent” and “West Texas Intermediate” recorded their first weekly gains in a month, as the two crudes increased by about 2%.
Brent crude futures fell 28 cents, or 0.8 percent, to $75.58 a barrel at settlement, and US West Texas Intermediate crude fell 25 cents, or 0.3 percent, to $71.69.
And the US crude contract for May delivery, which is scheduled to end on Monday, closed down 31 cents, or 0.4 percent, at $71.55 a barrel.
Time is limited for Biden and House Speaker Kevin McCarthy to reach an agreement to raise the federal borrowing ceiling of $ 31.4 trillion, or the government will face a catastrophic default. The Treasury warned that the government may not be able to pay its obligations by June 1.
A White House official said an agreement was still possible.
Concern prevails in the markets also due to the statements of Jerome Powell, Chairman of the US Federal Reserve, in which he said that inflation is still “much higher” than the level targeted by the bank. He added that no decision had been taken yet on the next step in terms of interest rates.
“It doesn’t look like they’re going to reach an agreement on the debt ceiling today,” said Robert Yawger, an analyst at Mizuho. “The possibility of a 25 basis point rate hike at the June meeting is growing every day.”
US stocks, Treasury yields and the dollar fell after news spread that talks to raise the debt ceiling and Powell’s remarks had stalled.
Data earlier in the week showed that the productivity of Chinese oil refineries in April rose 18.9% from a year earlier, to the second highest level ever.
Chinese refineries maintained high operating rates to meet the recovering domestic demand for fuel and build up stocks ahead of the summer travel season. (agencies)
