FX.co ★ Oil Prices Drop After Rally

Oil prices traded lower on Thursday after climbing nearly 3 percent in the previous session on expectations of higher demand and optimism surround the health of U.S. regional banks.

Benchmark Brent crude futures dropped half a percent to $76.59 a barrel, while WTI crude futures were down half a percent at $72.50.

Traders waited for further signs of progress in U.S. debt ceiling talks after a statement from the White House said President Biden is "optimistic that there is a path to a responsible, bipartisan budget agreement."

Investors waited for concrete signs that a deal would happen soon.

U.S. oil inventories jumped unexpectedly last week but that was due to another release from the Strategic Petroleum Reserve, EIA data showed on Wednesday.

Crude inventories rose by 5 million barrels in the week to May 12 to 467.6 million barrels, compared with analysts' expectations for a 900,000-barrel drop.

At the same time, gasoline inventories dropped as demand surged to its highest since 2021.