Oil advanced as traders embraced riskier assets amid optimism for US debt ceiling talks, largely ignoring a bearish US inventories report.
Crude oil settled above $72 a barrel on Wednesday as hopes that a deal to raise the U.S. government’s spending limit is possible fueled broader risk-on sentiment in markets. Capping some of the gains was a bearish report that showed U.S. stockpiles rose more than 5 million barrels last week, the biggest increase since January.
“Today’s trading action shows that fundamentals are really taking a back seat,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. “The data set was underwhelming, if not downright bearish, but crude is holding up as a risk-on tone shapes the macro trading environment.”
Crude is down about 9.4% this year as China’s slower-than-expected recovery, the Federal Reserve’s aggressive monetary tightening campaign and U.S. debt ceiling concerns United weigh the perspectives. Still, US retail sales rose in April, suggesting consumer spending in the world’s largest economy is holding up against headwinds.
Prices:
- WTI for June delivery rose $1.97 to settle at $72.83 a barrel in New York.
- Brent for July settlement gained $2.05 to $76.96 a barrel.
