Oil rises after Saudi Arabia's warning

Oil rose for a third session after Saudi Arabia issued a warning to short sellers and suggested OPEC+ could reduce output to boost prices. U.S. crude rose to $74 a barrel after rising almost 2 percent from the previous two days. Saudi Energy Minister Prince Abdulaziz bin Salman told speculators to “be careful” a week before the alliance meets to review output policy for the second half of the year. That offset a lack of progress in resolving the impasse over the U.S. debt ceiling that has weighed on broader financial markets. Speaker Kevin McCarthy said late Tuesday that the two sides had yet to reach a deal to avert a first default. “It raises the possibility that OPEC will intervene further in the oil market to support prices,” a strategist at Singapore-based Saxo Capital Markets added. Adding to the bullish sentiment, the industry-funded American Petroleum Institute reported that U.S. domestic crude inventories fell by 6.8 million barrels last week. If confirmed by government figures later on Wednesday, it would be the biggest drop since late March. Oil is still down for the year as China’s lackluster economic recovery after abandoning its zero-covid policy, the Fed raising interest rates and the recent failure to reach a deal on the debt ceiling weigh on the outlook. Russian flows have also held strong despite sanctions.