Oil Gains After US Debt Deal

Oil Gains After US Debt Deal
Oil Gains After US Debt Deal

Oil prices rose on Monday after US leaders reached a tentative debt ceiling deal, possibly averting a default in the world's largest economy and oil consumer, although concerns about further interest rate hikes capped gains.
Brent crude futures climbed by 45 cents, or 0.6%, to $77.40 a barrel, while US West Texas Intermediate crude was at $73.2 a barrel, up 53 cents, or 0.7%, Reuters reported.
Trade is expected to be subdued on Monday because of UK and US holidays.
US President Joe Biden and House Speaker Kevin McCarthy on the weekend forged an agreement to suspend the $31.4 trillion debt ceiling and cap government spending for the next two years. 
Both leaders expressed confidence that members of the Democratic and Republican parties will vote to support the deal.
Reaching the deal and coming closer to avoiding a default on US debt renewed investor appetite for riskier assets such as commodities.
Analysts said the provisional deal has taken pressure off the markets, offering a relief rally in risk assets, including crude oil.
"We could see more gains as a relief rally gets underway in the broader financial markets when the US comes back from the long Memorial Day weekend," Vandana Hari, founder of oil market analysis provider Vanda Insights, said.
Last week, Brent and WTI rose by more than 1%, gaining for a second week.

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