Last Update: May 18, 2023, 01:55 AM IST
Crude inventory builds added to concerns about US growth after data showed retail sales rose 0.4% in April, well below estimates for a 0.8% rise. (Image: Reuters file)
Brent crude futures rose $2.05, or 2.7%, to settle at $76.96 a barrel.
Oil prices climbed nearly $2 on Wednesday as optimism on oil demand and concerns about abundant supplies weighed on US debt ceiling talks.
Brent crude futures rose $2.05, or 2.7%, at $76.96 a barrel. US crude for West Texas Intermediate rose $1.97, or 2.8%, to $72.83.
Jim Ritterbush, President of Ritterbush & Associates, said, “Today’s strong oil trading was about expectations of a debt ceiling agreement, which is likely to be reached by the end of this week, which should carry a downside bias across most asset classes, including oil. appears to.” Galena, Illinois.
President Joe Biden and top US congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach an agreement soon to raise the federal government’s $31.4 trillion debt limit and avoid an economically devastating default.
After a months-long standoff, the Democratic president and the Speaker of the House of Representatives agreed on Tuesday to hold direct talks. An agreement needs to be reached and passed by both chambers of Congress before the federal government runs out of money to pay its bills by June 1.
The optimism overshadowed a crude inventory increase of 5 million barrels in the week ended May 12, reported by the Energy Information Administration. Analysts polled by Reuters had expected a decline of 900,000 barrels.
Crude inventory builds added to concerns about US growth after data showed retail sales rose 0.4% in April, well below estimates for a 0.8% rise.
However, gasoline stocks declined by 1.4 million barrels as four-week gasoline product supplies – a proxy for demand – rose to their highest level since December 2021.
The International Energy Agency predicted on Tuesday that demand would exceed 2 million barrels per day (bpd) in the second half of the year, with China expected to increase oil demand by 60% in 2023.
In China, April industrial production and retail sales growth came in below forecasts, indicating the economy slowed at the start of the second quarter.
Vandana Hari, founder of oil market analysis provider Vanda Insights, said markets are in a “wait-and-see mode” on the outcome of debt ceiling talks.
“A set of Chinese macro-economic data for April released on Tuesday confirmed a tangled and slow recovery story in the country and continued to weigh on oil market sentiment.”
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
