Oil prices edged higher on Thursday, recovering some ground from the previous day’s plunge on worries about future U.S. interest rate hikes, with markets now looking to key Chinese economic data for demand indications.
Brent crude futures climbed 21 cents, or 0.3 percent, to $73.41 a barrel by 0009 GMT. U.S. West Texas Intermediate (WTI) crude was at $68.50 a barrel, up 23 cents, or 0.4 percent.
Both benchmarks fell 1.5 percent on Wednesday after the U.S. Federal Reserve projected more rate hikes this year, triggering fears a higher interest rate environment would slow the economy and lower oil demand.
Higher interest rates also strengthen the dollar, making commodities denominated in the U.S. currency more expensive for holders of other currencies.
The U.S. dollar rose 0.5 percent against a basket of currencies in early trading on Thursday.
Attention on Thursday turned to China, the world’s top oil importer, set to announce key May economic data, including retail sales and industrial production. Investors are looking for signs of improvement in the country’s patchy economic recovery or further stimulus from Beijing.
China’s April data show economic recovery losing steam
China confident of hitting 2023 economic growth target -state planner
Adding to market jitters about weaker fuel demand, the European Central Bank is all but certain to raise borrowing costs to their highest level in 22 years on Thursday and leave the door open to more hikes.
ECB to raise rates further even as economy stutters
The Bank of England is also not yet done with rate rises as it battles inflation, a Reuters poll of economists found.
In another bearish sign on oil demand, U.S. crude oil stocks rose by about 8 million barrels in the week ended June 9, according to data from the Energy Information Administration. Analysts had estimated a 500,000-barrel decline.
Gasoline and diesel stocks also rose more than expected.
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