Oil fell by nearly 2% on May 30 as concerns about the U.S. debt ceiling pact cooled the market's risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.
Brent crude futures fell $1.36, or 1.8%, to $75.71 a barrel by 0859 GMT. WTI crude CLc1was down $1.19, or 1.6%, from Friday's close, to $71.48 a barrel. There was no settlement on May 29 because of a U.S. public holiday.
Some hard-right Republican lawmakers said on May 29 that they might oppose a deal that would raise the debt ceiling in the U.S., the world's biggest oil user, while Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy remained optimistic the deal would pass.
Biden and McCarthy forged an agreement over the weekend, and it must pass a divided U.S. 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.
"A potential default would have catastrophic economic repercussions domestically as well as globally, which would have an adverse impact on oil demand," PVM Oil's Tamas Varga said.
The debt deadline nearly coincides with the June 4 meeting of OPEC and allies including Russia, known as OPEC+, and the uncertainty over whether they will increase their output cuts amid a recent slump in prices is also weighing on the market.
Saudi Arabian Energy Minister Abdulaziz bin Salman last week warned short-sellers betting that oil prices will fall to "watch out" in a possible signal that OPEC+ may cut output.
However, comments from Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate the world's third-largest oil producer is leaning toward leaving output unchanged.
In April, Saudi Arabia and other members of OPEC+ announced further oil output cuts of around 1.2 MMbbl/d bringing the total volume of cuts by OPEC+ to 3.66 MMbbl/d, according to Reuters calculations.
Chinese manufacturing and service sector data out later this week will also be scrutinized for cues on the fu
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