Crude oil prices turned up around 3%, at the end of trading today, Wednesday, May 17 (2023), with optimism about demand for crude and the possibility of reaching an agreement on the US debt ceiling.
Crude prices fell during the session, after a sudden rise in US oil inventories, which raised concerns about demand in the wake of weaker-than-expected economic data from the United States and China.
Crude oil prices today
At the end of the session, benchmark Brent crude futures – for July 2023 delivery – rose 2.7%, to $76.96 a barrel.
West Texas Intermediate crude futures – for June 2023 delivery – also rose by 2.8%, to record a barrel of $72.83, according to information seen by the specialized energy platform.
And crude oil prices ended their trading yesterday, Tuesday, May 16 (2023), in decline, after a volatile session, as the impact of weak economic data in China overshadowed the United States’ announcement of its plans to buy huge quantities of crude to fill its strategic reserves.
US oil stocks
US oil inventories rose by about 5 million barrels in the week ending May 12, to continue the rise for the second week in a row.
7 analysts polled by Reuters expected a decline of 900,000 barrels, coinciding with US President Joe Biden’s administration announcing moves to refill the strategic oil reserves.
Crude oil inventories added to concerns about growth in the US, after data showed retail sales rose 0.4% in April, below estimates for a 0.8% increase.
US debt crisis
Talks about raising the US debt ceiling continue to weigh on the market, with the US Treasury estimating that the US will default as early as June 1 if Congress does not raise the debt ceiling.
For his part, US President Joe Biden has confirmed that he is confident that the United States will not default on its debt, with optimism that Congress will reach an agreement to raise the debt ceiling.
In China, industrial production and retail sales for April were lower than expected, indicating that the economy has lost momentum at the start of the second quarter.
“Sentiment soured amid stalled US debt ceiling talks and disappointing retail earnings overnight, as recession fears returned once again to global markets,” said CMC Markets analyst Tina Ting.
The markets are closely following any new moves on expanding sanctions against Russia by the G7 leaders when they meet in Japan on May 19-21.
Officials with direct knowledge of the discussions said the G7 is looking to target evasion of sanctions involving third countries, with the aim of limiting Russia’s future energy production and curbing trade that supports the Russian military.
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