Oil prices advance on demand and supply dynamics, US debt talks curb optimism
May 23, 2023
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May 23, 2023 (MLN): Oil prices climbed up on Tuesday owing to higher gasoline demand and OPEC+ supply cuts, but the gains were capped as still no deal was finalized on the U.S. debt ceiling from the Biden, McCarthy meeting.
Brent crude climbed 0.15% to $76.11 per barrel.
While West Texas Intermediate crude (WTI) rose 0.16% to $72.16 per barrel.
Notably, both oil benchmark prices rose in the previous session as well.
Meanwhile, Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, stated that "Oil prices are consolidating their bottoms, helped by a seasonal increase in U.S. gasoline demand from next week, production cuts by OPEC+ from this month and planned U.S. purchases to refill the Strategic Petroleum Reserve (SPR)," as reported by Reuters.
The gain can be attributed to a 2.83% increase in U.S. gasoline futures in the previous trading session ahead of the Memorial Day holiday on May 29 which usually signals the beginning of the high summer fuel demand season.
However, the gains were capped as investors remained focused on negotiations to raise the debt limit of the U.S.
President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement Monday on how to raise the U.S. government's $31.4 trillion debt ceiling with just 10 days before a possible default.