Oil holds decline as investors digest Moscow’s message on OPEC+

Oil was steady after falling more than 3% on Thursday as Russia suggested OPEC+ wasn’t likely to change production levels at its next meeting, and investors tracked talks to avoid a catastrophic US default.

West Texas Intermediate traded below $72 a barrel after Thursday’s tumble wiped out most of the week’s gains. Russia’s Deputy Prime Minister Alexander Novak said the group wasn’t likely to take further measures at the gathering in Vienna in June, undercutting earlier remarks from Saudi Energy Minister Prince Abdulaziz bin Salman that speculators should “watch out.”

In the US, Republican and White House negotiators were moving closer to an agreement to raise the debt limit, according to people familiar with the matter. Still, the details agreed to are tentative and a final accord is not yet in hand, with the Treasury’s cash balance now down to less than $50 billion.

Crude has sunk more than 10% this year as the lackluster economic recovery in top importer China and an aggressive monetary tightening campaign by the Federal Reserve pressured prices. More US rate rises may be in store, with traders pricing in another quarter-point increase within the next two meetings.

“Oil lost recent gains amid OPEC’s reluctance to cut production further,” said James Whistler, managing director for brokerage Vanir Global Markets Pte, referring to the comments from Moscow. “We see things softening a bit further from here as cautious sentiment permeates the markets.”

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