Oil prices remain steady as high inventories balance US debt bill development

Oil prices held steady on Thursday as news of rising inventories in the largest oil consumer in the world overshadowed likely pauses in US interest rate hikes and the passage of the crucial vote on the US debt ceiling bill.

Officials from the US Federal Reserve said on Wednesday that interest rates could remain unchanged this month, while the US House of Representatives passed a bill postponing the government's debt ceiling, increasing the likelihood that a catastrophic default won't occur.

While US West Texas Intermediate crude (WTI) declined by 16 cents, or 0.23%, to $67.93, Brent crude futures dropped 17 cents, or 0.23%, to $72.43 per barrel by 12:03 GMT. On Tuesday and Wednesday, both benchmarks dropped.

On the Multi Commodity Exchange (MCX), crude oil futures due for a June 16 expiry, were last seen trading lower by 0.70 per cent at ₹5,650 per bbl, having swung between ₹5,589 and ₹5,697 per bbl during the session so far, compared to their previous close of ₹5,690 per bbl.

China, the largest oil importer in the world, has given mixed signals about its demand, and industry statistics suggesting an increase in US crude inventories have also weighed on the market.

The Organisation of the Petroleum Exporting Countries (OPEC) and allies, including Russia, will consider whether or not to cut oil production further at the OPEC producer group meeting on June 4.

OPEC is unlikely to deepen production curbs at its ministerial meeting on Sunday, according to four alliance sources who spoke to Reuters, despite a drop in oil prices towards $70 per barrel. 

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(With inputs from Reuters)