Oil rebounds on fading risk of US debt default

Shafaq News / Oil prices rebounded on Friday from losses of more than 1% the previous day as investors turned cautiously optimistic over the fading risk of a U.S. debt default.

Brent futures rose 59 cents, or 0.8%, to $76.45 a barrel by 0420 GMT, while U.S. West Texas Intermediate crude climbed 48 cents, or 0.7%, to $72.34.

"I think markets have been pricing out the risks of a U.S. debt default, which translates to a more risk-on environment and some dip-buying in Brent crude from previous oversold conditions," said Yeap Jun Rong, a market strategist at IG.

Earlier this week, U.S. President Joe Biden and Speaker of the House of Representatives Kevin McCarthy reiterated their aim to strike a deal to raise the $31.4 trillion federal debt ceiling, agreeing to talk as soon as Sunday.

"Once we get over the U.S. debt ceiling issue, fundamentals may eventually matter more to determine if any upward move can be sustained," said Yeap.

Sentiment remains mixed as investors juggle optimism over avoidance of a U.S. debt default with inflation data that could portend more interest rate hikes from global central banks.

(Reuters)