Oil prices were little changed on Thursday as uncertainty over whether the United States will avoid a debt default weighed against the prospect of further OPEC+ production cuts.
Brent crude futures dipped 14 cents, to $78.22 a barrel while U.S. West Texas Intermediate crude (WTI) edged lower 25 cents, to $74.09.
Meanwhile, House Speaker Kevin McCarthy assured that some progress had been made but several issues remained unresolved in U.S. debt ceiling negotiations, as the deadline ticked closer to raise the federal government’s $31.4 trillion borrowing limit or risk default.
In the previous session, oil prices were supported by a warning from Saudi Arabia’s energy minister that short-sellers betting oil prices will fall should “watch out” for pain.
Some investors took that as a signal that the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, could consider further output cuts at a meeting on June 4.
Meanwhile, price declines were capped by an unexpected, massive fall in U.S. crude oil inventories in the week to May 19 reported by the Energy Information Administration on Wednesday.
U.S. crude inventories fell by 12.5 million barrels to 455.2 million barrels as imports declined. Analysts had expected an 800,000-barrel rise.
Gasoline inventories dropped by 2.1 million barrels in the week to 216.3 million barrels, the EIA said, while distillate stockpiles fell by 600,000 barrels to 105.7 million barrels.