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WorldAsiaUS debt concerns put pressure on oil markets

US debt concerns put pressure on oil markets


Fitch has placed the US AAA credit rating on watch for possible downgrade due to the risk of Washington defaulting on its debts if the US public debt ceiling is not raised.

The agency said in a statement that its decision “reflects the growing political tensions that stand in the way of resolving the issue by raising or suspending the public debt ceiling, at a time when the deadline” for U.S. public debt to reach the legal cap for her is fast approaching.

House Speaker Kevin McCarthy announced on Thursday that progress has been made in negotiations to raise the US debt ceiling, but many outstanding issues remain as the deadline approaches for raising the debt limit. Federal Government Borrowing $31.4 Trillion or Risk Defaulting.

Negotiators representing Democratic President Joe Biden and McCarthy held what both sides described as productive talks Wednesday at the White House, trying to seal a deal.

Oil prices were also pressured by news of a smaller than expected drop in Britain’s high inflation rate last month, official data showed, raising the odds of a a rate hike.

price movement

At 03:42 GMT, Brent crude futures fell 4 cents, or 0.05%, to $78.32 a barrel. U.S. West Texas Intermediate crude fell 14 cents, or 0.2%, to $74.20, according to Reuters data.

In the previous session, oil prices received support from Saudi Arabia’s energy minister, saying short sellers betting on lower oil prices should “beware”.

Some investors expected it to be a sign that the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, could consider approving further production cuts during of its June 4 meeting.

Oil was also supported by the unexpected drop in US crude oil inventories in the week ending May 19, which was reported by the Energy Information Administration on Wednesday.

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