Brent crude jumped to $77.8 thanks to a deal on US government debt

On Monday morning, the price of oil jumped to the level of $77.83 per barrel after the news that US President Joe Biden and Speaker of the House of Representatives Kevin McCarthy managed to reach a budget agreement. According to Biden, this will prevent the «worst possible crisis» in the form of a default on US debt.

Negotiators are finalizing the text of the bill, which will then go to the House of Representatives and the Senate.

As a result, the oil market reacted to this news with a sharp jump in prices. Brent crude rose to $77.83 per barrel, North American WTI crude rose to $73.55. 

However, the rise in prices was not long. By the middle of the trading day, the quotes of both benchmarks began to decline: Brent fell to $76.23 per barrel, and WTI – to $ 72.10. 

In general, oil has fallen by about 9% this year, as the weak recovery of the Chinese economy and the aggressive tightening of monetary policy by the US Federal Reserve affected the prospects for demand. At the same time, Russian supplies were steady even after the country announced that it would reduce production. It also does not contribute to the growth of oil.

Meanwhile, according to the oilfield services company Baker Hughes, the number of operating oil rigs in the States last week decreased by five units and amounted to 570. This is the minimum since March 2022.