Premarket action on Wednesday had the three major U.S. indexes trading lower. The Dow Jones industrials were down 0.16%, the S&P 500 down 0.20% and the Nasdaq 0.14% lower.

On Tuesday, U.S. markets opened higher after the long weekend, thanks in large part to the announced deal between President Joe Biden and House Speaker Kevin McCarthy on the debt ceiling. It did not take long for traders to figure out that there was some doubt that the deal would make it through the House of Representatives.

The first hurdle was a strictly procedural one: getting the bill out of the House Judiciary Committee. That happened Tuesday night. The next hurdle is getting the bill through the full House, and that will (or will not) happen late Wednesday.

The uncertainty weighed on stocks and, perhaps more heavily, on oil. By noon Tuesday, West Texas Intermediate (WTI) crude oil had dropped by more than 4% to near $69 a barrel. In early trading Wednesday, WTI fell below $68. Doubts about the ability of the U.S. Congress and president to close the deal on the debt ceiling got the early blame, but traders eventually began worrying more about the state of the global economy. Was the macroeconomic environment positive enough to support higher oil prices? Were consumers going to start spending again?

OPEC energy ministers will meet in Vienna Sunday to discuss further cuts to production. Russia, an OPEC+ heavyweight, already has said it will not cut production further.

Production cuts, in theory, raise demand and, of course, prices. Russia, the only OPEC+ member that really counts, needs cash, and oil is its only way to raise much of it. What is really worrying to OPEC, and to oil traders in general, is that Russia will raise production again, or, more likely, lie about how much it is producing.

At the end of March, the country’s energy minister said production had fallen by 700,000 barrels a day to around 9.4 million barrels. Bloomberg News reported that by its calculation, Russia produced 10.4 million barrels a day, down by 700,000 barrels from production of 11.1 million barrels a day in February. In February, Russia had pledged a production cut of 500,000 barrels a day.

But Russian seaborne exports have not fallen.

In fact, Bloomberg also has reported that the number of wells that have been shut in by one producer rose from 29.2% in February to 44% in April. Other Russian oil companies also reported higher levels of shut-in wells but by smaller amounts.

The U.S. Treasury Department reported in mid-May that Russian seaborne crude, which is allowed by the price cap program instituted after Russia’s February 2022 invasion of Ukraine, now fetches less than $60 a barrel compared to its pre-cap level of more than $100 a barrel. Before Putin’s invasion, oil revenue constituted about 30% to 35% of Russia’s total budget; that percentage has dropped to a current level of 23%, “despite Russia’s exporting roughly 5 to 10 percent more crude oil in April 2023 compared to March 2022.”

Russia’s Urals crude now trades for about $30 a barrel less than it did at this time last year.

The country cannot afford to cut production any further. That is what’s worrying crude oil traders right now. Will the OPEC ministers’ meeting sort that out? Unlikely.

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Here is a look at how U.S. markets fared on Tuesday.

Seven of 11 market sectors closed lower on Tuesday. Consumer staples (−1.08%) and energy (−0.94%) had the day’s biggest losses. Consumer cyclicals (0.76%) and technology (0.63%) posted the day’s best gains. The Dow closed down 0.15%, while the S&P 500 closed unchanged and the Nasdaq up 0.32% on Tuesday.

Two-year Treasuries lost eight basis points to end the day at 4.46% on Tuesday, and 10-year notes dipped by 11 basis points to close at 3.69%. In Wednesday’s premarket, two-year notes were trading at around 4.44% and 10-year notes at about 3.65%.

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