Oil prices were stable on Monday as U.S. debt ceiling negotiations dampened confidence about demand later in the year and offset support from reduced Canadian and OPEC+ supplies.
Brent crude futures increased 13 cents, or 0.2%, to $75.71 a barrel by 0850 GMT, while WTI for July delivery, the more actively traded contract, rose 12 cents, or 0.20%, to $71.81.
The June WTI contract, expiring later Monday, slipped 10 cents to $71.45 a barrel.
As markets worried about a probable economic slump and fuel demand drop, talks to avoid a U.S. government default resumed in Washington on Monday.
In its latest monthly report, the Paris-based International Energy Agency (IEA) warned of a second-half shortage when demand would likely exceed supply by over 2 million barrels per day (bpd).
“I expect plenty of volatility in the coming days and a bounce upward in crude prices as and when a deal is reached to raise the debt ceiling,” said Vandana Hari, founder of oil market monitoring service Vanda Insights.
After Alberta wildfires cut petroleum supplies, oil benchmarks rose 2% last week, their first weekly gain in five.
After taking effect this month, OPEC+’s voluntary output restrictions are also having an impact.
JP Morgan reported that group exports of crude and oil products fell by 1.7 million barrels per day (bpd) on May 16, and Russian oil exports will likely fall by late May.
At its annual leaders’ meeting on Saturday, the Group of Seven (G7) nations committed to increasing steps to prevent Russia’s evasion of price limitations on its oil and gasoline exports “while avoiding spillover effects and maintaining global energy supply,” without providing details.
On the sidelines of the G7 conference, IEA Executive Director Fatih Birol told Reuters that the steps would not affect oil supplies.
