Oil posted the first weekly gain since early April after tracking broader market sentiment that embraced risk assets on rising optimism the US will reach a debt-ceiling deal.
(Bloomberg) — Oil posted the first weekly gain since early April after tracking broader market sentiment that embraced risk assets on rising optimism the US will reach a debt-ceiling deal.
Crude largely abandoned the fundamental trade this week, with traders dissecting news from Washington on attempts to avert a catastrophic default. House Speaker Kevin McCarthy sent mixed messages by saying an agreement in principle may be reached as soon as this weekend, but adding on Friday that bipartisan talks in Washington are on a “pause.”
Signs of supply tightening are also helping buoy prices. Asian refiners are snapping up US oil cargoes again, and industry watchers continue to predict global crude markets will tip into deficit this summer.
Prices may rally in the second half of the year because of a shortage of crude supplies, Francisco Blanch, head of commodities research at Bank of America Corp., told Bloomberg television
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Crude is still down about 11% this year as China’s lackluster economic recovery and monetary tightening by the Federal Reserve weigh on the outlook. Fed officials injected some uncertainty into the market this week, sounding increasingly split on whether to raise interest rates or hold them steady at the meeting next month.
Wildfires continued to rage in Alberta, Canada’s top energy-producing province, disrupting output and adding some tightness to the market. Rystad Energy estimates that about 240,000 barrels a day has been shut due to the blazes.
–With assistance from Grant Smith and Natalia Kniazhevich.
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