Oil prices fell in early Asian trade on Thursday as traders warily watched for signs of progress on talks to raise the U.S. debt ceiling, after surging nearly 3% in the previous session on optimism over U.S. fuel demand. Brent crude futures dipped 20 cents, 0.3%, to $76.76 a barrel as of 0228 GMT. U.S. West Texas Intermediate crude also dropped 20 cents to $72.63 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. 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. On Thursday, investors were “awaiting further evidence that a deal will happen soon,” said Edward Moya, an analyst at OANDA.
“Crude needs a clear signal that the U.S. economy will avoid economic catastrophe or that China’s recovery is picking up steam,” he said. Also weighing on prices was the increased probability of an interest rate hike by the U.S. Federal Reserve.
SOURCE: REUTERS
