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Brent crude futures inched down 13 cents, or 0.2%, to $76.83 a
barrel as of 1142 GMT. U.S. West Texas Intermediate crude dipped
12 cents, or 0.2%, to $72.71 a barrel.
A sharp plunge in U.S. gasoline inventories due to demand
surging to the highest levels since 2021, and optimism
surrounding negotiations over the U.S. debt ceiling, helped the
main crude benchmarks settle more than $2 higher on
Wednesday.[EIA/S]
European equities were up [MKTS/GLOB] and the U.S. dollar hit a
new seven-week peak on Thursday, making oil more expensive for
holders of other currencies. [USD/]
President Joe Biden and top U.S. congressional Republican Kevin
McCarthy on Wednesday underscored their determination to reach a
deal to raise the federal government's $31.4 trillion debt
ceiling and avoid an economically catastrophic default.
A debt agreement needs to be reached and passed by both chambers
of Congress before the government runs out of money to pay its
bills, which could be as soon as June 1.
Also weighing on prices was the increased possibility of another
interest rate hike by the U.S. Federal Reserve.
Traders are pricing in around a 20% chance the Fed will raise
rates at its June meeting, whereas a month ago, traders were
pricing in around a 20% chance of a cut.
The strength of April U.S. economic data, in addition to
optimism about the debt ceiling negotiations and the health of
regional banking stocks overnight have strengthened market
expectations of a further hike, ANZ Research said in a note on
Thursday.
(Reporting by Stephanie Kelly and Sudarshan Varadhan; Editing by
Grant McCool, Sonali Paul and Christina Fincher)
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