Oil prices rose by 2% on Wednesday as optimism on oil demand and U.S. debt ceiling negotiations outweighed supply concerns.
Brent crude futures rose by $1.48, or 2%, to $76.39 a barrel by 11:56 a.m. EDT. West Texas Intermediate U.S. crude was up by $1.50 cents or 2.1% to $72.36.
The International Energy Agency on Tuesday predicted demand would outpace supply by 2 million barrels per day (bpd) in the second half of the year, with China making up 60% of oil demand growth in 2023.
The IEA’s assessment has added optimism to the market this morning,” said Bob Yawger, director of energy futures at Mizuho. He added that crude prices were also bolstered by optimism on debt ceiling talks.
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Debt ceiling negotiations have preoccupied market participants, who took heart from Republican House of Representatives Speaker Kevin McCarthy’s vow to avoid what would be a catastrophic default on Wednesday.
The optimism outweighed a crude inventory increase of 5 million barrels in the week ended May 12, the Energy Information Administration said on Wednesday.
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