Crude oil futures pared early gains and settled lower on Friday, weighed down by reports that the debt ceiling talks paused after Republican negotiators walked out the meeting, offseting recent optimism about an impending deal.
“Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing, then we’re not gonna sit here and talk to ourselves,” Rep. Garret Graves, R-La., told reporters.
West Texas Intermediate Crude oil futures for June ended lower by $0.31 or about 0.4% at $71.55 a barrel, coming off the day’s high of $73.40 a barrel. WTI crude futures gained about 2.2% in the week.
Brent crude futures were down $0.14 or 0.17% at $75.72 a barrel a little while ago.
Comments by Federal Reserve Chairman Jerome Powell that inflation remains “far above” the central bank’s objective, and that no decisions had been made yet on the next interest rate action weighed on markets.
Edward Moya, Senior Market Analyst at OANDA says, “crude prices were having a great week as the US economic outlook dramatically improved as lawmakers seem likely to reach a deal on the debt ceiling. Debt ceiling optimism quickly disappeared on Friday and that sent oil prices sharply lower. The news wasn’t all negative for crude prices as Fed Chair Powell paved the way for a June hold.”
“Oil looks like it might be stuck in a range around the low-$70s until we see further evidence that a debt deal will be reached and that supercore inflation doesn’t heat up,” Moya adds.
According to a report from Baker Hughes, oil rig count in the U.S. dropped by 11 to 575 this week, the biggest weekly decline since September 2021.
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