US House passes debt-ceiling suspension bill; oil prices rebound
SINGAPORE (ICIS)–The US’ House of Representatives has approved a deal to suspend the $31.4tr debt ceiling late on Wednesday, allowing the country to borrow more money and avoid a default.
The agreement suspends the debt ceiling until 1 January 2025.
Oil prices rose mid-morning following the, reversing earlier losses.
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The US House voted 314-117 to send the legislation to the US Senate, which must vote on the bill later this week before President Joe Biden can sign it into law. It is not yet clear when the Senate will vote.
The US government is forecast to hit its borrowing limit on 5 June. A default could cause financial markets to freeze up and ignite an international crisis.
US lawmakers have never failed to pass a suspension or increase in the debt ceiling before the Treasury ran out of cash to pay its obligations.
On Thursday morning in Asia, oil prices were trading lower, weighed down by data from the American Petroleum Institute (API) which showed a rise in US crude inventories last week, raising oversupply concerns.
Both crude benchmarks closed lower overnight on demand concerns following poor economic data from China and a firm US dollar.
China’s official Purchasing Managers Index (PMI) showed that manufacturing activity in the world’s second-biggest economy contracted further in May amid dwindling demand.
The manufacturing PMI in May fell by more than expected to 48.8 in May, down from 49.2 in April.
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