Oil steady after snapping streak of four-straight losing weeks

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Oil futures were slightly higher early Monday, flipping between small gains and losses as traders monitored talks to lift the U.S. government’s debt ceiling and avert a default.

Price action

  • West Texas Intermediate crude for June delivery


    rose 10 cents or 0.1%, to $71.65 a barrel on the New York Mercantile Exchange. July WTI

    the most actively traded contract, was up 9 cents, or 0.1%, at $75.67 a barrel.

  • July Brent

    the global crude benchmark, was up 11 cents, or 0.1%, at $75.69 a barrel on ICE Futures Europe.

  • Back on Nymex, June gasoline

    fell 0.1% to $2.574 a gallon, while June heating oil

    gained 0.2% to $2.366 a gallon.

  • June natural gas

    dropped 2.1% to $2.53 per million British thermal units.

Market drivers

President Joe Biden and House Speaker Kevin McCarthy, R-California, are set to meet Monday. The pair spoke by phone Sunday while the president was returning home on Air Force One after the Group of Seven summit in Japan. McCarthy told reporters at the Capitol that the call was “productive” and that the on-again, off-again negotiations between his staff and White House representatives were focused on spending cuts.

See: ‘Doomsday machine’: Here’s what could happen if the debt ceiling is breached

Data from oil-field services company Baker Hughes on Friday showed a third-straight weekly decline in the number of active U.S. rigs drilling for oil — down 11 to 575 this week.

“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizable deficit over the second half of this year. Producers appear to be responding to the weaker price environment, rather than expectations for a tighter market later in the year,” said Warren Patterson and Ewa Manthey, commodity strategists at ING, in a note.

“The macro picture is also likely making producers a little more hesitant. However, the trend will be good news for OPEC+, as it suggests that they will be able to continue supporting prices without the risk of losing market share to U.S. producers,” they wrote.


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