Oil up over 2% after US debt deal and jobs data; focus turns to OPEC+

03 Jun Oil up over 2% after US debt deal and jobs data; focus turns to OPEC+

Oil prices rose over 2% on Friday after the U.S. Congress passed a debt ceiling deal that averted a government default in the world’s biggest oil consumer and jobs data fueled hopes for a possible pause in Federal Reserve interest rate hikes.

Brent futures rose $1.85, or 2.5%, to settle at $76.13 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.64, or 2.3%, to settle at $71.74.

For the week, both contracts were down about 1%, in their first weekly losses in three weeks.

Open interest in futures contracts rose on Thursday to the highest since July 2021 for Brent and March 2022 for WTI.

The U.S. Senate approved a bipartisan deal to suspend the limit on the government debt ceiling, following approval in the House of Representatives, staving off a default that would have rocked financial markets.

U.S. employment increased more than expected in May, but a moderation in wages could allow the U.S. Federal Reserve to skip a rate hike this month for the first time in more than a year, which could support oil demand.

Oil traders will watch the June 4 meeting of OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. The group in April announced a surprise production cut of 1.16 million barrels per day, but resulting price gains have been erased and crude is trading below pre-cut levels.

OPEC+ is debating an additional oil production cut among possible options, three OPEC+ sources told Reuters on Friday.