Oil prices advance on optimism over U.S. debt ceiling talks

Oil prices advance on optimism over U.S. debt ceiling talks
# 18 May 2023 04:27 (UTC +04:00)

Crude oil futures prices picked up on Wednesday amid optimism on government debt limit talks in the United States, APA reports citing Xinhua.

The West Texas Intermediate (WTI) for June delivery gained 1.97 U.S. dollars, or 2.78 percent, to settle at 72.83 dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery added 2.05 dollars, or 2.74 percent, to settle at 76.96 dollars a barrel on the London ICE Futures Exchange.

U.S. leaders on Wednesday expressed optimism on the ongoing talks about the U.S. debt ceiling after the second meeting between U.S. President Joe Biden and congressional leaders on Tuesday.

Biden said he had a productive meeting with congressional leaders. "I'm confident that we'll get the agreement on the budget, that America will not default," he said before departure for his Asia trip.

Speaking in an interview on Wednesday, U.S. House Speaker Kevin McCarthy also expressed optimism that the United States would not default on its debt obligations "at the end of the day."

Oil soared on debt ceiling optimism while decline of domestic oil production in the previous week provided additional support to oil prices, according to Vladimir Zernov, analyst with market information supplier FX Empire.

U.S. daily crude oil production dipped to 12.2 million barrels in the week ending May 12 from 12.3 million barrels in the week before, according to oil inventory data issued by the U.S. Energy Information Administration on Wednesday.

However, U.S. commercial crude oil inventories increased by 5 million barrels last week in contrast with the market expectation of a week-on-week decrease.

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