U.S. crude rose above $72 a barrel, gaining nearly 3 percent over the week. House Speaker Kevin McCarthy said negotiators could reach an agreement in principle as soon as this weekend. Crude oil purchases by some Asian refineries added to the bullish sentiment in the market.
Crude oil is still down 10 percent this year as China’s sluggish economic recovery and the Fed’s monetary tightening weigh on the outlook. Fed officials seem increasingly divided on whether to raise interest rates or take a break at their next meeting, adding some uncertainty to the market.
“Oil prices seem to be taking cues from the broader risk environment,” said Yeap Jun Rong, market strategist at IG Asia Pte. Rong added that the debt ceiling talks and optimism about the country’s plan to replenish its strategic reserves could provide support for futures.
In Alberta, Canada’s most energy-producing province, wildfires continued, interrupting production and adding some tightness to the market. Rystad Energy estimates that around 240,000 barrels of oil a day were shut down due to the flames.