Oil advanced after President Joe Biden and House Speaker Kevin McCarthy reached a tentative deal over the weekend on the US debt ceiling, likely averting a catastrophic default.

West Texas Intermediate rose above $73 a barrel after closing 1.2% higher on Friday. Biden and McCarthy voiced confidence that their tentative agreement will pass Congress and reach the president’s desk for signature. Liquidity is expected to be thin on Monday with the US and UK on national holidays.

Oil is still around 9% lower this year as China’s lackluster economic recovery and the Federal Reserve’s aggressive monetary tightening weighed on the demand outlook. Russian supply has also been resilient, even after the nation said it would cut output, while domestic crude processing has dropped.

Supply dynamics remain in focus, with Saudi Arabia and Russia offering conflicting statements recently on the potential for changes to supply policy from OPEC+. The group meets in Vienna on June 3-4 to decide output levels.

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