May 19 Reuters Oil prices rebounded on Friday from losses of more than 1 the previous day as investors turned cautiously optimistic over the fading risk of a U.S. debt default.

Brent futures rose 69 cents, or 0.9, to 76.55 a barrel by 0923 GMT, while West Texas Intermediate U.S. crude climbed 56 cents, or 0.8, to 72.42.

I think markets have been pricing out the risks of a U.S. debt default, which translates to a more riskon environment and some dipbuying in Brent crude from previous oversold conditions, said Yeap Jun Rong, a market strategist at IG.

Earlier this week, U.S. President Joe Biden and Speaker of the House of Representatives Kevin McCarthy reiterated their aim to strike a deal to raise the 31.4 trillion federal debt ceiling, agreeing to talk as soon as Sunday.

Traders were reluctant to go into the weekend short, on the off chance that an agreement to raise the U.S. governments debt ceiling is struck over the weekend, said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Sentiment remains mixed as investors juggle optimism over avoidance of a U.S. debt default with inflation data that could portend more interest rate hikes from global central banks.

U.S. inflation does not seem to be cooling fast enough to allow the Federal Reserve to pause its interestrate hike campaign, according to two Fed policymakers.

The potential for additional rate hikes increases concerns about demand weakness in the United States, said analysts from…