• Oil price finds a floor after Republicans and Democrats agree a deal to extend the US government debt ceiling on Sunday.
• The deal means a default is unlikely and boosts demand prospects in the US. 
• US interest rates are expected to rise further after debt deal and strong US macro data.
• Higher interest rates, however, will strengthen the US Dollar but weigh on Oil.  

Oil price remains in a familiar range within the $72s on Monday, as traders in both the US and UK take a break to enjoy the bank-holiday weekend. WTI Oil is finding support from the news US lawmakers have agreed to extend the US debt ceiling, subject to a vote in Congress. Yet this has also had the effect of raising interest rate expectations – a factor weighing on Oil price. Higher interest rates will lead to a stronger US Dollar, putting pressure on Oil price, which is priced in Dollars. 

At the time of writing, WTI Oil is trading in the mid $72s and Brent Crude Oil in the mid $76s.  

Oil news and market movers 

• Oil settles in a familiar range as traders in the US and UK take time off for a long bank-holiday weekend. 
• Crude is supported by the news that a deal has been struck to extend the debt-ceiling deal on Sunday, between House Republicans and Democrats. 
• More upside is expected on Tuesday, when market participants return to their desks, and once the debt deal has been voted through Congress, the final step to making it law. 
• The extension of the debt ceiling as well as robust US macroeconomic data has increased market expectations that the Federal Reserve (Fed) will have to raise interest rates at their next meeting to combat rising inflation expectations – bullish for the US Dollar; bearish for Oil.  
• The CME FedWatch tool shows a 60.7% chance of the Fed raising interest rates by 0.25% at their meeting on June 14.  
• Traders further await the outcome of the next meeting of OPEC on June 4, when the possibility of production cuts has been raised.  
• Saudi Oil Minister Prince Abdulaziz bin Salman seemed to imply OPEC might cut production quotas when he warned speculators (interpreted as short-sellers) should “watch out” at a press conference last week. 
• Russia’s Energy Minister Alexander Novak, however, later played down the idea of production cuts. “I don't think that there will be any new steps, because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries," he said. 

Crude Oil Technical Analysis: Triangle formation hinting end of downtrend?

WTI Oil is in a long-term downtrend from a technical perspective, making successive lower lows. Given the old adage that the trend is your friend, this favors short positions over long positions. WTI Oil is trading below all the major daily Simple Moving Averages (SMA) and all the weekly SMAs except the 200-week, which is at $66.90