Crude futures settled nearly flat Thursday as markets waited for progress on plans to settle the debt-ceiling stalemate.

Light, sweet crude for September delivery settled 4 cents higher at $97.44 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange closed 7 cents lower at $117.36 a barrel.

Oil prices wavered between gains and losses through much of the session. A surprise drop in weekly jobless claims, and oil production stoppages in the Gulf of Mexico due to Tropical Storm Don looked set to push the market higher. But traders are fearful of making new bets on prices heading in either direction as Congress struggles to find enough votes to raise the debt limit.

"We're just kind of in a holding pattern," said Tom Bentz, director of BNP Paribas Commodity Futures. "All the markets are very tentative right now."

The Aug. 2 deadline for increasing the U.S. debt limit is just days away, and the U.S. faces a potential default and downgrade of its debt if Congress fails to raise the limit and enact substantial spending cuts or revenue increases.

On Thursday, House Republican leadership goaded lawmakers to vote for a plan it supports, even though the bill has little chance of passing the Democrat-controlled Senate.

The stock market also held near flat Thursday, with the Dow Jones Industrial Average recently down 0.1% to 12,246. The ICE Dollar Index, which measures the dollar against a basked of currencies, was trading slightly higher.

A drop in stocks earlier this week helped pull oil back from triple-digit levels hit Tuesday. But crude prices have been resilient, particularly as traders keep watch on developments in the Gulf of Mexico.

Tropical Storm Don has already prompted evacuations of non-essential personnel from several oil and gas platforms in the Gulf as it travels toward the south Texas coast. Early Thursday, Exxon Mobil Corp. (XOM) said it had shut in roughly 8,000 barrels a day of production ahead of the storm.

The U.S. National Hurricane Center said in an advisory Don is moving northwest across the southern Gulf with sustained wins of 45 miles per hour. Some strengthening is expected over the next 36 hours.

"Even if it's a mild storm, they still have to shut down," said Rich Ilczyszyn, a broker with Lind-Waldock in Chicago. "Then if there's damage, then that's something we have to worry about too. The risk is to the upside right now."

The number of new people claiming jobless benefits last week fell to the lowest level in nearly four months, declining by 24,000 to 398,000, the Labor Department said Thursday. A reading below 400,000 is considered by economists to mean the economy is adding more jobs than it is shedding.

Front-month August reformulated gasoline blendstock, or RBOB, settled 2.47 cents, or 0.8%, lower at $3.1176 a gallon. August heating oil settled 2.26 cents higher at $3.1052 a gallon.