Crude Oil Under Pressure of OPEC’s Investment Call and Looming U.S. Debt Crisis

Crude oil prices got off to a timid start to the week, with the benchmark slipping slightly at the time of writing after edging up slightly in the previous week.

OPEC Secretary General Haitham al-Ghais cautioned on Monday that the lack of investment in the oil and gas industry could lead to market volatility in the long term, putting the sector's growth at risk. Speaking at the Middle East Petroleum and Gas Conference in Dubai, the OPEC secretary general articulated minimization of greenhouse gas emissions while encouraging investment in all energy sectors.

At the time of writing, Brent Crude oil was trading at just over $75.70 a barrel, while West Texas Intermediate settled at around $71.80 a barrel, as the U.S. debt ceiling talks were resumed after U.S. president Biden’s return from G7 Summit, and demand The recovery is struggling to grab the attention of traders.

Ongoing U.S. debt-ceiling talks have been a major bearish factor for oil prices in recent days amid growing concerns that a debt default is not out of the question. If that happened, then full-fledged recession will be on the table, meaning U.S. oil demand would drop significantly. That pressure could lead to a 5th straight monthly decline for Brent this month, which would be the benchmark's worst performance since 2017, according to Bloomberg.