Oil drops as debt angst climbs and Novak says OPEC+ to stand pat

Oil fell as tensions over the U.S. debt-ceiling impasse rose and Russia played down the chances that OPEC+ will cut production further.

West Texas Intermediate dropped toward US$74 a barrel after rallying nearly four per cent over the previous three days as U.S. crude inventories sank and Saudi Arabia warned speculators to “watch out.” Fitch Ratings said it may downgrade U.S. credit ratings to reflect the partisanship preventing a debt-ceiling deal.

The Organization of Petroleum Exporting Countries and its allies are unlikely to take any new steps at their first face-to-face meeting in six months in early June after a recent decision to cut output, Russia's Deputy Prime Minister Alexander Novak said in an interview with Izvestia.