Oil Prices Rise after the U.S. Reaches a Debt Ceiling Deal

Oil prices gained on Monday as the US reached a preliminary debt ceiling deal, which could prevent a default in the world’s largest economy; however, rises were limited by worries about future interest rate hikes.

By 13.36 hrs. Bangkok time, Brent crude futures were up 45 cents, or 0.6%, to $77.40 per barrel, while U.S. West Texas Intermediate crude climbed 53 cents, or 0.7%, to $73.2 per barrel. Due to U.K. and U.S. holidays, Monday is anticipated to be a slow trading day.

The U.S. President Joe Biden and the Speaker of the United States House of Representatives Kevin McCarthy came to an agreement to reach a tentative deal to suspend the federal government’s $31.4 trillion debt ceiling on Saturday evening. 

Still, the process is not done, the deal would have to pass the voting of the House, dominated by Republicans with 222-213 seats and Senate with a 51-49 Democratic majority, which would likely take place on Wednesday.

Both leaders are optimistic that members of the Democratic and Republican parties will support the agreement.

Analysts have noted a relief surge in risk assets such as crude oil after the tentative settlement was announced.