Oil prices edged lower on Thursday, easing on concerns over plentiful supply after surging nearly 3% during the previous session.
Brent crude futures dipped 24 cents to $76.72 a barrel. U.S. West Texas Intermediate crude dropped 21 cents to $72.62.
Both benchmarks rose nearly 3% on Wednesday on optimism over oil demand and U.S. debt ceiling negotiations.
Weighing on prices, U.S. oil inventories jumped unexpectedly last week due to another release from the Strategic Petroleum Reserve. Crude inventories rose by 5 million barrels in the week to May 12 to 467.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 900,000-barrel drop. [EIA/S]
Still, U.S. gasoline inventories dropped as demand surged to its highest since 2021.
Investors are watching developments around U.S. debt ceiling negotiations.
Meanwhile, President Joe Biden and top U.S. congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal soon to raise the federal government’s $31.4 trillion debt ceiling and avoid an economically catastrophic default. After a months-long standoff, the Democratic president and speaker of the House of Representatives on Tuesday agreed to negotiate directly. 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, as soon as June 1.