Oil calms as crude stocks stabilize

Oil steadies as U.S. debt ceiling optimism offsets rising crude inventories. Oil steadied in Asia after rising nearly 3 percent on Wednesday as optimism that the U.S. will resolve the debt ceiling impasse fueled broad gains in financial markets, offsetting a broadly bearish U.S. inventory report. U.S. crude traded below $73 a barrel after the biggest daily gain in almost two weeks. U.S. President Joe Biden expressed confidence that negotiators will reach a deal to avoid default, while House Speaker Kevin McCarthy remained hopeful of a deal. Oil is still down this year as monetary tightening in the U.S. and lackluster economic growth in China weigh on demand outlooks and supply remains strong. Refining margins have narrowed and at least one Asian processor plans to cut operating rates starting in June. U.S. crude inventories rose by 5 million barrels last week, the biggest increase since mid-February, government data showed on Wednesday. “The oil market continues to be driven by external developments rather than fundamentals,” said Warren Patterson, head of commodity strategy at ING Groep NV.