Oil Prices stable amid U.S. debt ceiling negotiations

May 22, 2023

On Monday, oil prices remained steady due to cautious sentiments surrounding U.S. debt ceiling negotiations, which offset the positive outlook for demand later in the year. The support from reduced supplies from Canada and OPEC+ producers also played a role.

Brent crude futures saw a modest increase of 19 cents, or 0.3%, reaching $75.77 per barrel by 1323 GMT. Meanwhile, the more actively traded contract, U.S. West Texas Intermediate (WTI) crude for July delivery, rose by 17 cents, or 0.2%, to $71.72 per barrel. The June WTI contract, expiring later on Monday, also rose by 17 cents, reaching $71.72 per barrel.

Discussions to prevent a U.S. debt default were scheduled to resume in Washington on Monday. The possibility of a default and its potential consequences, such as an economic downturn and a decline in fuel demand, continued to unsettle the markets.

However, the International Energy Agency (IEA) warned of an impending shortage in the second half of the year, with demand expected to outpace supply by nearly 2 million barrels per day (bpd). This insight was highlighted in the latest monthly report from the Paris-based agency.