Oil falls as weak Chinese industrial data deter investors

Oil prices dropped on Wednesday as investor risk appetite was affected by worse-than-expected China industrial data, but losses were contained by optimism about a resolution to the U.S. debt ceiling impasse.

International benchmark Brent crude traded at $73.56 per barrel at 09.56 a.m. local time (0656 GMT), a 0.20% fall from the closing price of $73.71 a barrel in the previous trading session on Friday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $69.33 per barrel, down 0.19% from the previous session's close of $69.46 per barrel.

Following news that China's official Purchasing Managers' Index (PMI) dropped to 48.8 in May from 49.2 in April, according to the National Bureau of Statistics (NBS) on Wednesday, the price of Brent oil dropped more than 4% in the previous trading session. This is the lowest level since December, when it dropped to 47.

A bipartisan agreement is now up for debate in the House of Representatives with expectations of being passed on Wednesday, following the White House and Republican Speaker of the House, Kevin McCarthy, reaching an agreement at the weekend to raise the U.S. debt ceiling.

Investors are now awaiting the production decision of major producers in the OPEC+ group on Sunday.

It will be the first ministerial meeting of the group after some OPEC+ countries in April decided to cut output by 1.6 million barrels per day (bpd) on top of their existing cuts of 2 million bpd.