Investing.com -- Crude prices reversed early gains on Friday amid reports that talks to raise the U.S. debt ceiling had hit an impasse again. But oil bulls still had some hurrah: the first weekly rise in five from gains between Monday and Wednesday.
President Joe Biden and his main Republican rival in Congress Kevin McCarthy have previously said they are closer than before to a deal to raise the $31.4 trillion U.S. debt ceiling, and that a conclusion could come as early as Sunday to avoid a federal default on payments by June 1.
But media reports on Friday suggested that the talks were going nowhere. “White House is not being reasonable,” said a headline citing Republican debt negotiators. Another, which ran on Fortune.com and quoting Republican negotiator Garret Graves, was more affirmative on the standoff. “It’s time to press pause because it’s just not productive,” Graves was quoted as telling reporters.
By 12.07 ET (16:07 GMT), New York-traded West Texas Intermediate, or WTI, crude was down 33 cents, or 0.5%, to $71.53 per barrel. Week-to-date though, WTI was up 2.2%. The U.S. crude benchmark fell a cumulative 15% over four prior weeks.
London-traded Brent crude, the global benchmark for oil, was down 22 cents, or 0.3%, to $75.64. For the week, Brent was up 2% after four previous weeks of losses totaling 14%.
Both WTI and Brent had rallied by more than $1 earlier on Friday on optimism that the debt ceiling talks were making progress.
“Traders were reluctant to go into the weekend short, on the off chance that an agreement to raise the U.S. government’s debt ceiling is struck over the weekend,” Vandana Hari, founder of oil markets advisory Vanda Insights, said in comments carried by Reuters.
Craig Erlam, analyst at online trading platform OANDA, concurred. “[A U.S. debt] default was almost certainly never a realistic possibility in the first place,” Erlam said.
Also boosting oil was a weaker dollar, which makes commodities like crude which are priced in the greenback more affordable to holders of other currencies. The Dollar Index was down for the first time in five sessions even as some speculators held to the belief that the Federal Reserve will raise rates for an 11th straight time when the central bank’s policy makers meet on June 14.