Oil headed toward its first weekly gain in over a month on Friday amid renewed optimism that the U.S. government will reach an agreement to raise its debt ceiling.
West Texas Intermediate—the U.S. benchmark—traded at a little over $72 per barrel, marking a rise of around 3% for the week. Crude remains down by 10% this year, however, with China’s post-pandemic economic recovery proving to take longer than was previously expected. A sliver of optimism was delivered as some Chinese refiners continue to buy crude.
Still, optimism around the ongoing debt ceiling talks have appeared to overshadow China’s slow economic rebound. House Speaker Kevin McCarthy revealed that negotiators are expected to reach a deal by the conclusion of the weekend.
“Oil prices seem to be taking its cue from the broader risk environment,” Yeap Jun Rong, a market strategist for IG Asia Pte. observed. Aside from the debt ceiling negotiations, investor confidence has been further fueled by the upcoming U.S. driving and travel season as well as the nation’s plan to replenish its strategic reserves.