Oil closes 3% higher on optimism about US debt ceiling

Oil drilling rigs

Oil closed higher today, May 17, amid optimism about US debt ceiling negotiations and after the release of US inventories data.

Brent crude futures settled up 2.7%, or $2.05, at $76.96 a barrel. West Texas Intermediate crude closed 2.8%, or $1.97, higher at $72.83.

Oil gained support after US President Joe Biden said he was confident to reach an agreement with Congress leaders, noting that everyone agreed that the US would not default.

US Energy Information Administration data revealed that oil inventories rose by 5 million barrels last week, but gasoline stocks fell by 1.4 million barrels.

Russian President Vladimir Putin said that Moscow’s pledge to cut production voluntarily aims to maintain a certain price environment in the global markets.

Swiss bank UBS lowered its forecast for oil prices, as it expects Brent crude to reach $95 a barrel by the end of this year, instead of its previous forecast of $105 a barrel, citing fears of a recession.