Crude oil prices went down today in Asian trade, after making small gains on Monday when news came out that President Biden and House Speaker and top Republican Kevin McCarthy had reached a deal to raise the debt limit.
But now, Reuters is saying that some Republican “hardliners” in Congress won’t back a deal that raises the debt ceiling. This could make it harder for the deal to pass.
At the time this was written, a barrel of Brent oil sold for close to $76.50, while a barrel of West Texas Intermediate sold for just over $72 per barrel. Both were down a little bit when trading started today.
In the last two weeks, oil prices have changed a lot because of how Republicans and Democrats in Congress can’t seem to agree on how to raise the federal government’s spending limit.
Early stories about the tentative deal between Biden and McCarthy say that spending will stay the same over the next two years and that unused Covid funds will be used again.
But it looks like this is not good enough for some Republicans in and out of Congress. “It’s not worth it. Rep. Chip Roy said on Twitter, “$4 trillion in debt for, at best, a two-year spending freeze and no major policy changes.”
“After this deal, our country will still be careening toward bankruptcy,” Florida Governor Ron DeSantis said on Fox News.
This means that getting the deal through would be hard, but not impossible. Democrats and Republicans have always been able to put aside their differences to avoid a debt default, so this shouldn’t be a problem.
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Aside from the problems with the U.S. debt cap, another thing that has been putting pressure on prices is that Saudi Arabia and Russia, the leaders of OPEC+, may be sending messages that are at odds with each other.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman is said to have suggested more cuts, but Russia’s Deputy Prime Minister Alexander Novak said there was no need for more cuts.
