Crude-oil futures declined Wednesday as the impasse over raising the U.S. debt ceiling continued in Washington and as a weekly inventories report showed a surprise increase and a bearish outlook for demand.
Crude for September delivery lost $1.42, or 1.5%, to $98.24 U.S. a barrel on the New York Mercantile Exchange.
The Energy Information Administration said oil inventories rose 2.3 million barrels in the week ended July 22.
Analysts had expected a decline around one million to two million barrels.
Gasoline inventories rose one million barrels on the week, the EIA said. Supplies of distillates, which include heating oil and diesel, increased by 3.4 million barrels, the agency added.
August gasoline traded flat at $3.15 a gallon, while August heating oil declined a penny, or 0.4%, to $3.10 U.S. a gallon.
Demand for total petroleum products also fell on the week, and so far this year has decreased 3.2%.
In addition to supply-and-demand constraints, macroeconomic risk remains a worry for investors overshadowing the energy market, analysts said, with the uncertainty likely to persist in the coming days.
The impasse between U.S. lawmakers over how to go about raising the debt ceiling continued to stoke fears about future energy demand, and lured investors to the traditional safe haven of gold.
House Speaker John Boehner was busy rewriting his bill to cut spending and raise the limit before the Treasury Department’s Aug. 2 debt-ceiling deadline after the Congressional Budget Office ruled late Tuesday his plan would cut spending less than he had sought. A Thursday vote in the House is now expected.
Earlier Wednesday, U.S. durable-goods orders fell 2.1% in June, the Commerce Department said. Economists had expected a flat reading.
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