02 June 2023
Dear clients,
Oil prices rose on Thursday by the largest amount in a fortnight ahead of the OPEC+ meeting on Sunday, while the passage of a bill to suspend the US debt ceiling by the House of Representatives helped offset the impact of rising stocks in the country.
US West Texas Intermediate crude rose $2.01, or 3 per cent, to settle at $70.10 a barrel, recording its biggest daily gain since May 5. Brent crude futures rose $1.68, or 2.3%, to $74.65 a barrel, the biggest daily gain since May 17.
Both benchmarks recovered after two consecutive sessions of declines after the House of Representatives passed a bill late on Wednesday night to suspend the US government debt ceiling and improve the chances of preventing a default. The bill now moves to the Senate.
Market attention has shifted to the OPEC+ meeting on 4 June. Sources within the organisation said the alliance was unlikely to deepen supply cuts at Sunday's meeting, but some analysts believe this is possible as demand figures in China and the US have been disappointing in recent weeks.
US crude inventories rose unexpectedly last week as imports jumped and strategic stocks fell to their lowest level since September 1983, according to the Energy Information Administration.
Data from China's manufacturing sector presented a mixed picture, with Thursday's Caixin/S&P Global manufacturing PMI better than expected, while official government data from the previous day reported that activity at firms in May contracted to its lowest level in five months.
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