By Shadia Nasralla
LONDON (Reuters) - Oil prices were steady on Thursday, as optimism over recovering Chinese demand was offset by U.S. oil inventories hitting their highest in months and signs the U.S. Federal Reserve could keep raising interest rates.
Brent crude futures gained 30 cents to $85.39 a barrel by 0856 GMT, while U.S. West Texas Intermediate (WTI) crude futures inched up 26 cents to $78.73 a barrel. Both benchmarks have gained around 7% so far this week.
"Relentlessly rising U.S. commercial inventories and potentially entrenched inflation limit any immediate upside potential," said PVM analyst Tamas Varga.
He said recovering Chinese demand and falling inflation were set to support oil prices in the second half of the year.
Crude oil stocks in the United States rose last week to their highest since June 2021, helped by higher production, the Energy Information Administration said.
U.S. gasoline and distillate inventories also rose last week.
U.S. Federal Reserve officials said more interest rate rises are on the cards as the bank presses forward with its efforts to cool inflation, sending bearish signals across risk assets like oil and equities. [GLOB/MKTS]
But the prospect of stronger demand from China lent some support to oil prices, as the world's second-largest oil consumer ended more than three years of stringent zero-COVID policy.
"We expect Chinese oil consumption to increase by around 1.0 million barrels a day this year, with strong growth emerging as early as late in Q1," analysts from ANZ bank wrote in a note.
"Overall, this should push global demand up by 2.1 million barrels a day in 2023."
BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Feb. 7, after a massive earthquake struck Turkey and Syria early on Monday.
Brent's front-month loading contract rose to a $3-a-barrel premium over contracts six months out, a market structure called backwardation, which indicates traders seeing tight current supply.
(Additional reporting by Muyu Xu; Editing by Bernadette Baum)
(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.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app