Oil rises 3% on US debt ceiling progress, traders on alert for OPEC+ meeting

Oil prices rose on Friday in early Asian trade as markets weighed the likelihood of price-supportive OPEC+ production cuts over the weekend amid positive sentiment over U.S. monetary policy and Washington's debt ceiling bill.

Brent crude futures rose 13 cents, or 0.18 per cent to $74.41 a barrel by 0115 GMT, while U.S. West Texas Intermediate crude (WTI) rose 15 cents, or 0.21 per cent, to $70.25 a barrel, following two consecutive days of sliding crude prices.

Markets were reassured by signals of a potential pause in rate hikes by the Federal Reserve as well as the House of Representatives' passage of a bill suspending the U.S. government debt ceiling, likely staving off a calamitous sovereign default.

The U.S. debt ceiling bill is currently awaiting approval by the Senate, which Democratic Majority Leader Chuck Schumer has said will stay in session on Thursday night U.S. time until it is passed.

Market sentiment was also buoyed by Thursday's U.S. crude stock data from the Energy Information Administration, which indicated that crude imports had jumped last week.

Investor attention is now fixed on the upcoming June 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, collectively called OPEC+.

Ministers from key oil producing countries will decide whether to further trim output to support government revenues.

Further reductions in OPEC+ output following their surprise cut of 1.16 million barrels per day in April would be bullish for crude prices.

Signals on any such cut have been varied, with Reuters reporting and analysts from banks including HSBC and Goldman Sachs indicating that further outputs cuts are unlikely and that the bloc would adopt a "wait and see" approach.

Other market observers have pointed to weak manufacturing data out of China and the U.S. as supporting the case for OPEC+ cuts.

In the U.S., Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI fell to 46.9 last month from 47.1 in April, the seventh-straight month that the PMI stayed below the 50 threshold, indicating a contraction in manufacturing activity in the world's largest oil consumer.

Manufacturing data out of China painted a mixed picture, with Thursday's better-than-expected Caixin/S&P Global China manufacturing PMI contrasting with the previous day's official government data that reported factory activity in May had contracted to the lowest level in five months.