After rising in the previous session on hopes that U.S. gasoline demand would increase, oil prices declined on Thursday as traders cautiously looked for signs of progress in negotiations to raise the country's debt ceiling.

The main crude benchmarks ended the day more than $2 higher on Wednesday thanks to a steep decline in U.S. gasoline stockpiles brought on by demand reaching its best levels since 2021 and optimism over talks over raising the U.S. debt ceiling.

Brent crude futures plunged 0.5%, to $76.59 per barrel meanwhile West Texas Intermediate crude slid 0.5%, to $72.49 per barrel.

Oil became more expensive for owners of other currencies on Thursday as the U.S. dollar remained close to a seven-week high.

The heightened likelihood of another interest rate increase by the US Federal Reserve also had an impact on prices.

In contrast to a month ago, when markets were pricing in a 20% likelihood of a cut, they now estimate there is a 20% chance the Fed will increase rates at its meeting in June.