May 29 Reuters Oil prices were steady on Monday after U.S. leaders reached a tentative debt ceiling deal, possibly averting a default in the world39;s largest economy and oil consumer, but concerns about further interest rate hikes capped gains.

Brent crude futures climbed 14 cents, or 0.2, to 77.09 a barrel by 0905 GMT, while U.S. West Texas Intermediate crude was at 72.88 a barrel, up 21 cents, or 0.3.

Trade is expected to be subdued on Monday because of UK and U.S. holidays.

U.S. President Joe Biden and House Speaker Kevin McCarthy over the weekend forged an agreement to suspend the 31.4 trillion debt ceiling and cap government spending for the next two years. Both leaders expressed confidence that members of the Democratic and Republican parties will vote to support the deal.

Reaching the agreement and coming closer to avoiding a default on U.S. debt renewed investor appetite for riskier assets such as commodities.

Analysts said the provisional deal has taken pressure off the markets, offering a relief rally in risk assets, including crude oil.

We could see more gains as a relief rally gets under way in the broader financial markets when the U.S. comes back from the long Memorial Day weekend, said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Still, analysts see any boost in oil prices from the debt deal as shortlived.

The U.S. Federal Reserve may still raise interest rates in June, IG39;s Sydneybased analyst Tony Sycamore said Higher…