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Brent crude was down 27 cents, or 0.4%, to $76.14 a barrel at
1200 GMT, while U.S. crude futures dipped 29 cents, or 0.4%, to
$72.27. Both contracts are still on track for their first weekly
percentage gain in four.
The Bank of England raised its key interest rate by a quarter of
a percentage point, taking UK borrowing costs to their highest
since 2008 with its 12th consecutive rate rise, as it seeks to
curb the fastest inflation of any major economy.
On Wednesday, U.S. data showed a key inflation measure monitored
by the Federal Reserve eased somewhat, potentially providing
cover for the central bank to pause further increases to
interest rates next month. Higher rates can weigh on oil demand.
Government data on Wednesday showed U.S. gasoline and diesel
inventories fell last week, reflecting stronger demand for
transport fuels, while crude oil stockpiles rose unexpectedly on
the back of a national reserves release and lower exports. [EIA/S]
Meanwhile, investors are also awaiting news from talks on
raising the U.S. government's $31.4 trillion debt ceiling, which
kicked off on Wednesday, with Republicans continuing to insist
on spending cuts.
The standoff sent the cost of insuring exposure to U.S.
government debt to record highs as Wall Street grows more
concerned about the risk of an unprecedented default. [MKTS/GLOB]
"Once a compromise is reached ... investors will be encouraged
to act and stocks will probably rally, providing invaluable
support for oil," said PVM analyst Tamas Varga.
(Reporting by Shadia NasrallaAdditional reporting by Jeslyn Lerh
in SingaporeEditing by David Goodman and Mark Potter)
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