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RIYADH: Oil prices fell on Tuesday, giving up earlier gains, as concerns about the viability of the US debt ceiling pact cooled the market’s risk-on sentiment and mixed messages from major producers have clouded the supply outlook ahead of their meeting this weekend.
Brent crude futures fell 60 cents, or 0.78 percent, to $76.47 a barrel at 9:23 a.m. Saudi time, after rising by 0.5 percent earlier on Tuesday.
US West Texas Intermediate crude dipped 37 cents to $72.30 a barrel, down 0.51 percent from Friday’s close. There was no settlement on Monday because of a US public holiday.
Some hard-right Republican lawmakers said on Monday they might oppose a deal that would raise the debt ceiling in the US, the world’s biggest oil user, while Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy remained optimistic the deal will pass.
Biden and McCarthy forged an agreement on the debt over the weekend, and it must pass a divided US Congress before June 5, the day the Treasury Department says the country will not be able to meet its financial obligations, which could disrupt financial markets.
OPEC will welcome Iran’s return to oil market when sanctions lifted
The Organization of the Petroleum Exporting Countries will welcome Iran’s full return to the oil market when sanctions are lifted, its secretary-general told the Iranian oil ministry’s news website SHANA on Monday.
Iran is an OPEC member, although its oil exports are subject to US sanctions to curb Tehran’s nuclear program.
Secretary-General Haitham Al-Ghais, who is visiting Tehran for the first time, added that Iran could bring on significant production volumes within a short period of time.
“We believe that Iran is a responsible player among its family members, the countries in the OPEC group. I’m sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years,” SHANA’s website cited him as saying.
Asked about OPEC’s voluntary production cut and its effect on oil prices, Al-Ghais said, “In OPEC ... we don’t target a certain price level. All our actions, all our decisions are made in order to have a good balance between global oil demand and global oil supply.”
In a surprise move in early April, Saudi Arabia and other members of OPEC+, which comprises OPEC and allies including Russia, announced further oil output cuts of around 1.2 million barrels per day.
Brazil’s Petrobras approves new commercial portfolio for natural gas
Brazilian state-run oil company Petrobras on Monday announced a new commercial portfolio for natural gas, saying it was moving to include “diversified” deadlines, benchmarks and places of delivery to “ensure competitiveness.”
Petroleo Brasileiro SA, as the firm is formally known, said it would resume using Henry Hub benchmark prices for gas in addition to Brent oil prices while offering distributors more options for contract deadlines and delivery locations.
(With input from Reuters)