Oil futures: Prices lower as US debt-ceiling standoff casts shadow
Quantum Commodity Intelligence – Crude oil futures Friday were drifting lower and heading for a fourth weekly loss, as the Washington debt-ceiling standoff and broader economic concerns continued to weigh.
Jul23 ICE Brent futures were trading at $74.20/b (1810 GMT), compared to Thursday's settle of $74.98/b and last Friday's $75.30/b.
At the same time, Jun23 NYMEX WTI was trading $70.11/b, versus Thursday's close of $70.87/b and last Friday's $71.34/b.
JPMorgan's CEO Jamie Dimon was the latest high-profile voice warning over the debt standoff, saying an actual default would be "potentially catastrophic" for the wider economy.
Such an event would ripple through global financial markets, impacting "contracts, collateral, clearing houses, and affect clients definitely around the world... If it gets to that panic point, people have to react," he told CNBC.
Oil prices found some support after US Energy Secretary Jennifer Granholm flagged for the second time in a week the department could start a buyback program for the SPR after a 26 million-barrel mandated sale is completed in June.
However, traders were waiting for more concrete details.
"Originally the US administration had said that it would look to start refilling the SPR if WTI traded down to the US$67-72/b area. The market has traded down to these levels this year, but we have seen no signs of refilling," said Warren Patterson, head of ING's commodity research.
Patterson also noted the DoE had said previously it would be difficult to refill the SPR until later in the year due to mandated releases and maintenance at storage sites.
The latest OPEC monthly report had little impact on prices, although the market took some consolation from the 50,000 bpd increase in China's demand forecast, bringing demand growth to 800,000 bpd in 2023 for the world's largest oil importer.
On the supply side Iraq has sent a request to Turkey to resume pipeline flows to the Ceyhan export terminal, although it was unclear Friday if Ankara had granted permission.
