Oil prices rose on Thursday, reversing earlier losses, as a potential pause in U.S. interest rate hikes and the debt ceiling bill passing a crucial vote renewed optimism about further fuel demand growth in the world’s biggest oil consumer.
Brent crude futures for August rose 32 cents, or 0.44% to $72.92 a barrel by 0518 GMT, while U.S. West Texas Intermediate crude (WTI) rose 25 cents, or 0.37%, to $68.34 a barrel.
U.S. Federal Reserve officials on Wednesday pointed towards a potential rate hike “skip” in June that reversed market expectations of an imminent hike that could slow economic growth and weaken oil demand.
Additionally, the U.S. House of Representative’s passage of a bill suspending the U.S. government’s $31.4 trillion debt ceiling improved the chances of averting a disastrous government default.
Both benchmarks had fallen steeply in the previous sessions, with Brent down 5.6% and WTI dropping 6.3% as of the close on Wednesday, from last Friday.
“Oil markets may have been oversold in the last two trading days due to the sluggish Chinese data and debt ceiling concerns. Sentiment rebounded amid the debt bill’s passage in the House, and (the) Fed’s rate hike pause signal also offered a rebounding opportunity”. -REUTERS
