Oil prices were little changed on Thursday as uncertainty over the US debt default was offset by OPEC+ expectations for further production cuts.
Brent crude futures were down 14 cents, or 0.2%, to $78.22 a barrel as of 0635 GMT. West Texas Intermediate crude (WTI) fell 25 cents, or 0.3%, to $74.09.
Speaker of the House Kevin McCarthy had said that some progress had been made in US debt ceiling negotiations, but there were still some issues, as the deadline to raise the federal government’s $31.4 trillion borrowing limit, or risk default, approaches.
Negotiators from Democrat Joe Biden and Republican Kevin McCarthy met again at the White House on Wednesday to reach a deal.
A cautious approach to the risk environment brought by the uncertainty of the US debt ceiling put oil prices in a wait-and-see situation in the Asian session.
While oil prices remain stable for now, after the strengthening of the US dollar, it is looking for a catalyst to be able to continue its recent recovery.
In the previous session, oil prices were bolstered by a warning from Saudi Arabia’s energy minister that short sellers who claim oil prices will fall should “watch out”.
Some investors took this as a sign that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, would introduce further production cuts at the June 4 meeting.
Meanwhile, price declines were capped by an unexpected, large drop in US crude inventories during the week of May 19, reported by the Energy Information Administration (EIA) on Wednesday.
U.S. crude oil inventories decreased by 12.5 million barrels to 455.2 million barrels as imports decreased. However, analysts were expecting an increase of 800,000 barrels.
Gasoline inventories fell 2.1 million barrels a week to 216.3 million barrels, while distillate inventories fell 600,000 barrels to 105.7 million barrels, according to the EIA.