Oil steadied after a two-day drop as investors tracked stop-start negotiations in the US to strike a deal on the debt ceiling.
Brent crude was little changed below $76 a barrel after losing almost 2% over the prior two sessions. President Joe Biden and House Speaker Kevin McCarthy will meet later Monday after negotiators resumed discussions. Treasury Secretary Janet Yellen warned the US may be unable to pay its bills by mid-June.
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The global crude benchmark is at risk of posting a fifth straight monthly loss in May in what would be the worst run since 2017. In addition to the fallout from the debt-ceiling fight, traders are concerned about the impact on energy demand of China’s lackluster economic recovery and the possibility of a recession in the US. In paper markets, money managers that trade derivatives linked to oil and fuel prices are the most bearish they’ve been in a decade.
In Canada, meanwhile, the wildfire situation in the top energy-producing province of Alberta remained volatile over the weekend, with disruption to oil and gas production meaning that buyers face supply cuts. At least two buyers were notified of force majeures and reductions to their receipts of low-sulfur Canadian crude, according to people familiar with the matter.
