NEW YORK: Oil prices fell more than 4% on Tuesday on concerns about whether the US Congress will pass the US debt ceiling pact and as mixed messages from major producers clouded the supply outlook ahead of the OPEC+ meeting this weekend.
Brent crude futures dropped $3.50, or 4.5%, to $73.57 a barrel by 12:51 p.m. EDT (1651 GMT). US West Texas Intermediate (WTI) crude was down $3.29, or 4.5%, from Friday’s close, to $69.38 a barrel. There was no settlement on Monday because of a US public holiday.
Some hard-right Republican lawmakers said they might oppose a deal to raise the debt ceiling in the United States, the world’s biggest oil user. Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy remained optimistic the deal would pass.
Biden and McCarthy forged an agreement over the weekend that must pass a divided US Congress before June 5, the day the Treasury Department has said the country will not be able to meet its financial obligations, which could disrupt financial markets.
The debt deadline nearly coincides with the June 4 meeting of OPEC+ - the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. Traders were uncertain about whether the group will increase output cuts as a slump in prices weighs on the market.
Saudi Arabian Energy Minister Abdulaziz bin Salman last week warned short-sellers betting that oil prices will fall to “watch out” in a possible signal that OPEC+ may cut output.
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