Oil slips as U.S. debt caution offset supply concerns

Oil prices slipped on Monday as caution around the U.S. debt ceiling talks and concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers.

Brent crude futures fell 48 cents, or 0.6%, to $75.10 a barrel by 0201 GMT while U.S. West Texas Intermediate (WTI) crude for July delivery, the more actively traded contract, fell 45 cents, or 0.6%, to $71.24.

The June WTI contract , which expires later on Monday, fell 52 cents to $71.03 a barrel.

The resumption of U.S. debt ceiling negotiations later on Monday will remain a key driver for crude and risk sentiment this week, IG’s Sydney-based analyst Tony Sycamore said. The U.S. is the world’s biggest oil consumer.

Investors were also concerned that China’s recovery is faltering after weak economic data reports in the past two weeks, he added.

“If the housing market continues to fall and policymakers fail to respond, the risk of a double-dip China slowdown increases, which spells bad news for crude oil consumption and demand,” Sycamore said. China is the world’s top crude importer and No. 2 oil consumer.

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