Oil prices fall 5% amid skepticism over debt ceiling deal


Andrei Rudakov/Bloomberg

  • Oil prices fell on Tuesday as concerns over demand for the commodity accelerated.

  • West Texas Intermediate crude fell 5% to $69.02 a barrel.

  • Two of the nine Republicans on the House Rules Committee have signaled their opposition to the debt ceiling agreement.

Oil prices fell on Tuesday as demand worries gathered pace on fears that a weekend deal to raise the US debt ceiling by $31 trillion could be derailed.

U.S. and international oil prices each fell to their lowest since May 5. West Texas Intermediate crude fell 5% to $69.02 a barrel. Brent crude lost as much as 4.9% when it hit $73.16.

The price cuts were then reduced to around 4.6% each.

The oil market appeared nervous over potential signs of rebellion within Republican ranks over the tentative debt deal that House Majority Leader Kevin McCarthy reached with the White House over the weekend. -end.

The Fiscal Responsibility Act, if passed, would limit basic US spending for two years and raise the debt ceiling through 2025.

But several members of the Freedom Caucus were among GOP lawmakers who indicated they would not support the deal, Politico reported Tuesday.

And CNBC reported that two of the nine Republican members of the House Rules Committee signaled their opposition to bringing the proposal to the House for a vote on Tuesday.

“Oil prices remain locked pending Congress’ response to the debt ceiling agreement,” Saxo Bank strategists said in a note on Tuesday.

Oil prices were coming off a weekly victory buoyed by a warning from Saudi Arabia’s energy minister that short speculators should “be careful”. Saxo Bank said the warning helped boost Brent net long positions to the maximum in two months in the week to May 23.

The Treasury Department on Friday revised its outlook for when the government will run out of cash to pay the bills, to June 5 from June 1. OPEC will hold its June meeting just before that deadline, and investors could see the group announce production cuts.

Read the original article on Business Insider

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