[1/2] A tugboat pushes an oil barge through New York Harbor past the Statue of Liberty in New York City, US, May 24, 2022. REUTERS/Brendan McDiarmid
LONDON (Reuters) – Oil prices rose on Friday after a US debt ceiling deal averted a default by the world’s largest oil consumer and jobs data showed interest rate hikes may stall, while attention turned to a meeting of OPEC ministers and their allies. in the weekend.
Brent crude futures rose $1.88, or 2.5%, to $76.16 a barrel by 1328 GMT, while US West Texas Intermediate crude rose $1.85, or 2.6%, to $71.95 a barrel. However, both contracts are heading for their first weekly loss in three weeks.
Markets have been reassured by a bipartisan deal to suspend the maximum $31.4 billion US government debt ceiling, which averted a sovereign default that would have rattled global financial markets.
Previous signs of a possible pause in interest rate hikes by the Federal Reserve have also provided a boost to oil prices, not least by influencing the US dollar, which has made oil cheaper for holders of other currencies.
US employment increased more than expected in May, but moderation in wages may allow the Federal Reserve to skip raising interest rates this month for the first time since embarking on a policy tightening campaign more than a year ago.
Investor interest is also focused on the June 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively called OPEC+.
OPEC+ announced in April a surprise cut of 1.16 million barrels per day, but the gains from that move have since been corrected and prices are below pre-cut levels.
Sources told Reuters that new production cuts are unlikely.
On the demand side, the US Institute for Supply Management (ISM) said its manufacturing PMI fell to 46.9 last month, for the seventh consecutive month below 50, indicating a contraction in activity.
Meanwhile, manufacturing data from China, the world’s second-largest oil consumer, painted a mixed picture.
(Reporting by Shadia Nasrallah). Additional reporting by Andrew Haley. Editing by Susan Fenton and Kirsten Donovan
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