Oil dips on Monday on uncertainties as to the outfall of ensuing US debt ceiling talks.

Additionally, worries on Chinese demand rebound along with supply cuts from Canada and OPEC+ producers underpin prices, writes news agency Reuters.

A barrel of European benchmark Brent goes for USD 74.84 on Monday morning, down from USD 76.24 on Friday afternoon. US West Texas Intermediate simultaneously trades at USD 70.81, down from USD 72.09.

US debt ceiling negotiations resume on Monday which will set the pace for crude and risk sentiment this week, writes Reuters, citing analyst Tony Sycamore, also adding:

”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,” says Sycamore.

The effects of dwindling production output from the Organization of the Petroleum Exporting Countries and its allies, OPEC+, is felt after going into effects this month, says analysts from Goldman Sachs and JPMorgan to Reuters.

Combined oil products exports from the group stooped to 1.7 million barrels per day on May 16, while Russian oil exports is expected to drop towards the end of May, says JPMorgan to Reuters.

Elsewhere, the number of active US oil platforms fell by 11 to 575 which is the largest weekly drop since September 2021, says US energy services firm Baker Hughes.

”A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizeable deficit over the second half of this year,” ING said.