Oil prices rose more than 1% on Thursday, after falling for three straight days, as U.S. gasoline stocks declined on strong travel demand and as China's central bank sought to bolster the property market and wider economy.
Brent crude futures rose $1.24, or 1.5% to $84.70 a barrel by 11:18 a.m. ET (1518 GMT). U.S. West Texas Intermediate crude (WTI) was up $1.48, or 1.8% at $80.86 a barrel.
The previous session, prices fell more than 1.5% on worries about China's embattled economy and potential for further increases to U.S. interest rates.
"Travel demand has remained stubbornly strong," said Dennis Kissler, senior vice president of trading at BOK Financial.
Travel demand typically tapers down after U.S. Independence day holiday on July 4. Yet U.S. gasoline stocks drew to the lowest in more than two months, U.S. Energy information data showed on Wednesday. Weekly products supplied, a proxy for demand, rose to the highest since December. [EIA/S]
China's central bank said it would keep liquidity reasonably ample and maintain "precise and forceful" policy to support economic recovery against headwinds.
"Oil traders like the fact that China isn't going to tolerate weakness in economic activity," said Naeem Aslam at Zaye Capital Markets.
U.S. interest rates remain in focus a day after minutes of the Federal Reserve's July meeting showed officials did not give strong indications about pausing rate hikes.
Higher interest rates increase borrowing costs, which could slow economic growth and reduce oil demand.
On a bullish note, China made a rare draw on crude oil inventories in July, the first time in 33 months it has dipped into storage.
Data released on Wednesday showed that U.S. crude oil inventories fell by nearly 6 million barrels last week on strong exports and refining run rates. [EIA/S]
Oil looks like it will find a home around the $80 level as too many risks to the macroeconomic outlook remain on the table, OANDA's Moya added.
(Reporting by Arathy Somasekhar in Houston; additional reporting by Natalie Grover in London, Katya Golubkova and Sudarshan Varadhan in Singapore. Editing by David Goodman and Christina Fincher; Editing by David Gregorio)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)