Oil erased earlier gains on Thursday as concerns of impending talks about the U.S. debt ceiling overshadowed a G7 finance leaders’ meeting. The talks, which kicked off on Wednesday, concern raising the U.S. government’s $31.4 trillion debt ceiling.
Brent crude lost 27 cents, or 0.4%, putting it at $76.14 per barrel. U.S. crude futures fell 29 cents, or 0.4%, to $72.27. Despite their marginal declines, both contracts remain on track to record their first weekly gains in four weeks.
U.S. inflation data released on Wednesday showed a slight cooldown, thereby giving the Federal Reserve more grounds to loosen its monetary policy and potentially put a halt on its interest rate hikes.
Gasoline and diesel inventories fell last week, thereby indicating a rise in fuel demand, while crude oil stockpiles rose amid lower exports.
In the U.S. debt ceiling talks, Republicans are largely expected to request spending cuts. This notion is aimed at preventing the U.S. government’s debt from reaching record highs, thereby potentially leading to an unprecedented default.