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Brent crude futures were up 76 cents, or 1%, at $75.05 a barrel
by 0916 GMT. U.S. West Texas Intermediate (WTI) crude was up 63
cents, or 0.9%, at $70.05.
Both benchmarks climbed more than 3% the previous day on hopes
of rising fuel demand after China's central bank lowered a
short-term lending rate.
Market participants expect the U.S. central bank's Federal Open
Market Committee (FOMC) to pause interest rate hikes because of
uncertainty over the economic outlook and the lagged effects of
10 rate increases since March 2022.
Higher interest rates strengthen the dollar, making commodities
denominated in the U.S. currency more expensive for holders of
other currencies. A pause in the Fed's rate increases would spur
economic growth and oil demand, supporting prices.
"Rates will most likely remain unchanged today when the Fed
contemplates its next move, but the more salient question is
whether this pause also means that the peak rate of the current
cycle has been reached or not," said PVM Oil analyst Tamas Varga.
The IEA, meanwhile, increased its oil demand growth forecast for
this year by 200,000 barrels per day (bpd) to 2.4 million bpd,
lifting the projected total to 102.3 million bpd.
However, the agency expects economic headwinds to reduce growth
to 860,000 bpd next year and increasing use of electric vehicles
to help to reduce that to 400,000 bpd in 2028 for overall demand
of 105.7 million bpd.
The IEA's 2023 oil demand growth figure is slightly above that
of the Organization of the Petroleum Exporting Countries (OPEC).
On the supply side, U.S. crude oil stocks rose by about 1
million barrels in the week ended June 9, according to market
sources citing American Petroleum Institute figures, contrary to
an average estimate of a 500,000 barrel decline from analysts
polled by Reuters.
Government data on stockpiles is due later in the day.
(Reporting by Ahmad Ghaddar; Additional reporting by Andrew
Hayley in Beijing; Editing by David Goodman)
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