NEW YORK ( TheStreet) -- West Texas Intermediate light sweet crude oil prices were jumpy Thursday as the markets got caught between U.S. debt concerns, a bearish inventory report, and uplifting domestic economic news.
West Texas Intermediate light sweet crude oil for September delivery was rising 20 cents to $97.60 a barrel after falling 16 cents a barrel in early trading. WTI futures traded as a high as $98.01 and as low as $96.51 in the morning.
"WTI crude is trading very skittishly, closely awaiting news regarding the U.S. debt ceiling," said Summit Energy analyst Matt Smith.
Brent crude for September delivery was rising 74 cents to $118.17 a barrel and trading steadily in positive territory throughout the morning, as it was more insulated from the U .S. crude stockpile news released on Wednesday. This, amid support from year-long production disruptions in the North Sea Buzzard oilfield due to a defective cooling system and lost Libyan output due to the civil war.Brent crude prices on Thursday were pricing in a premium connected to the build-up of tropical storm Don in the Gulf of Mexico, which was heading for the coast of Texas, the main U.S. oil producer and the location of over 25% of the country's refinery capacities. "The tropical activity is more bullish for Brent than WTI -- given WTI it is priced at Cushing, OK -- as Brent is a better proxy for prices across the whole of the U.S. Hence it is pricing in more of a premium for the tropical storm," said Smith. The spread between WTI and Brent remains strong Thursday as the markets expect a downgrade of U.S. credit ratings regardless of whether lawmakers raise the country's borrowing limit on time. Meanwhile, oil traders have been weighing a bigger-than-expected crude inventory build against a downtick of initial claims by 24,000 to 398,000 in the week ended July 23 and a rise in pending home sales for June by 2.4% to an index reading of 90.9. U.S. lawmakers are meeting today to vote on the latest plan for raising the U.S. debt ceiling to avoid a debt default. The House is expected to vote on a bill from House Speaker John Boehner. If Democrats reject the proposal, as many expect they will, lawmakers will have to go back to the drawing board. Thursday's vote was already delayed because the Congressional Budget Office had said that Boehner's plan would not cut as much in spending as Republicans had said. WTI fell more than $2 Wednesday on the U.S. debt concerns, a stronger dollar and a strong inventory build. The Energy Department reported on Wednesday an unexpected increase in U.S. crude stocks, for the first time in nine weeks, of 2.3 million barrels. "It can be accounted for by higher crude imports and a drop in capacity utilization," Commerzbank analyst Carsten Fritsch said.