2023.06.0119:12:00UTC+00Oil Futures Settle Sharply Higher

Crude oil prices rose sharply on Thursday on hopes the OPEC and allies will announce a cut in production.

Oil prices were also supported by a weak U.S. dollar, and the passage of the debt ceiling bill in the House of Representatives.

Crude oil prices drifted down earlier in the day after data showed a large build in inventories, and on concerns about outlook for energy demand after data showed manufacturing activity slowed in several countries.

Data released by the Energy Information Administration (EIA) showed crude inventories increased by 4.5 million barrels in the week ended May 26, as against expectations for a draw of around 1.1 million barrels.

Gasoline inventories dropped by 0.369 million, while distillate stockpiles rose by 0.985 million barrels last week.

West Texas Intermediate crude futures for July ended higher by $2.01 or about 3% at $70.10 an ounce, rebounding from a four-week low of $67.07 it touched in the previous session.

Brent crude futures were up $1.71 or 2.36% at $74.31 a barrel a little while ago.

"Oil prices are finding some support as they are too close to critical support levels," says Edward Moya, Senior Market Analyst at OANDA. "If prices remain significantly under pressure going into the weekend, the Saudis might try convincing the Russians to take part in some type of modest production cut."

"If WTI crude breaks below the $67 level it could get ugly fast and momentum selling could eye a retest of the May lows. OPEC+ has mostly been successful in controlling prices and this could be a do-or-die moment if Brent can't hold the $70 level," adds Moya.