ISLAMABAD: Crude oil prices edged up slightly amid mixed sentiment on Monday as fears of a possible US debt default continue to run high. As of 1020 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.14 (+0.19 percent) to reach $74.31. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.19 (+o.27 percent) to $70.23. During early trade on Monday, oil prices extended the losses of the previous sessions, as traders’ worry about the state of the global economy trumped any expectations of tight supply. Both Brent and WTI shaved off 1.5 percent and 1.82 percent respectively last week on a week-on-week basis. During the last four weeks, Brent has been down by 14 percent while WTI has dropped by 15 percent. TLTP
The price of Russian Sokol decreased by $2.51 (-3.71 percent) to $65.20. Similarly, Arab Light prices witnessed a decrease of $2.67 (-3.4 percent) to reach $75.87 a barrel.
The price for Opec Basket increased by $0.38 (+0.5 percent) to $76.69. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Concern mounted that the world’s biggest oil consumer, the United States, will enter recession, with talks over the US government’s debt ceiling postponed and concern growing over another crisis-hit regional bank. Ongoing troubles for US regional banks and a political showdown over the Biden administration’s debt ceiling amplified worries that aggressive monetary tightening by the Federal Reserve and other major central banks could lead to a sharp economic downturn or recession later this year.
This is not the first time the US Congress is taking its time agreeing to higher debt limits and it is not the first time various officials are sounding the default alarm. The current debt ceiling of the United States is $31.4 trillion. Democrats and the White House want this raised without any conditions but Republicans insist on some spending cuts in order to agree to the raise.
Since the start of the year, oil has lost some 13 percent and traders have accumulated the largest short position on the commodity since July 2021.
