Brent dips after concerns about US debt ceiling deal emerge

The front-month ICE Brent contract has shed $1.61/bbl on the day, to $75.59/bbl at 09.00 GMT.

PHOTO: Oil barrels and a pump jack placed on US dollars. Getty Images

Upward pressure:

Conflicting statements from oil producers before the OPEC+ meeting on 4 June have created uncertainty regarding potential supply cuts. 

"The voluntary production cuts in April caught the market off guard. This time, investors are extremely cautious before the final decision is announced," said analysts from Haitong Futures in a note.

Downward pressure:

Brent futures have come down after concerns about the tentative US debt ceiling pact created risk-on sentiment in the market.

Investors are also waiting for Chinese manufacturing and services data to be released this week to examine the chances of a fuel oil demand recovery in the world’s largest oil-importing country.

“Chinese equities have been pretty disappointing, as is true of most cyclical exposures, notably oil,” said SPI Asset Management’s Stephen Innes.

On the other hand, OPEC will welcome Iran’s complete return to the oil market after sanctions are lifted, said OPEC Secretary General Haitham Al Ghais said according to the Iranian Oil Ministry’s website SHANA. Iran can bring on significant production volumes in short periods, added the Secretary General.

"We believe that Iran is a responsible player amongst its family members, the countries in the OPEC group. I’m sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years," SHANA's English-language website cited him saying.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online