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Prices had fallen for the previous session on simmering worries
over the impact on fuel demand from a deepening property crisis
that is stifling momentum in China's economy and the potential
for further increases to U.S. interest rates.
Brent crude futures rose 67 cents to $84.12 a barrel by 1058 GMT
and U.S. West Texas Intermediate crude (WTI) was up 63 cents at
$80.01.
"Oil traders like the fact that China isn’t going to tolerate
weakness in economic activity," said Naeem Aslam at Zaye Capital
Markets after China's central bank said that it will adjust and
optimise property policies in a timely manner.
Interest rates also remain in focus, with minutes of the U.S.
Federal Reserve's July meeting released on Wednesday. The
minutes showed the central bank's officials did not give strong
indications about pausing rate hikes in an effort to prioritise
the battle against inflation.
Higher interest rates increase borrowing costs for businesses
and consumers, which could slow economic growth and reduce oil
demand.
"Crude prices are going to struggle here as we have bearish
sentiment in the world's two largest economies," said OANDA
analyst Edward Moya.
On a more bullish note, China made a rare draw on crude oil
inventories in July, the first time in 33 months that it had
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]
If the market had received that data in friendlier macroeconomic
climes, the narrative of a tightening market would be at the top
of news screens rather than today's blight of financial
considerations, said John Evans at oil broker PVM.
(Reporting by Natalie GroverAdditional reportingby Katya
Golubkova and Sudarshan VaradhanEditing by David Goodman)
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