Western Texas Intermediate (WTI), the US crude oil benchmark, recovered some lost ground during the week, driven by factors like mixed signals from OPEC+ regarding potential output cuts, ongoing discussions between US politicians about the debt ceiling, and higher-than-expected US inflation.
WTI crude oil trades with gains of $0.99 or 1.35% after hitting a daily low of $71.54, exchanging hands at $72.75 per barrel.
The rise in oil prices comes as conflicting statements emerged from OPEC+'s significant producers. Russia expressed its expectation that there would be no alteration to production quotas during the cartel's meeting, citing the voluntary cuts of over one million barrels per day implemented at the beginning of May. Conversely, Saudi Arabia's oil minister cautioned short sellers to remain vigilant.
The upward trajectory of oil prices also corresponds with reports of progress in negotiations between the Biden Administration and House Republicans concerning a deal to raise the US debt ceiling for two years. This development alleviates concerns that the country would face an unprecedented default on its debt payments.
However, recent data from the US reveals stronger-than-expected consumer spending in the previous month, which increased by 0.5% following a stagnant performance in March. Additionally, the Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation gauge, rose by 4.4% annually, surpassing the 4.2% growth reported in March.
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