Oil prices rose on Thursday after a plunge the previous day, as data showed a jump in refinery runs at the world’s top crude importer China, but a weak economic backdrop capped gains.
Brent crude futures were up 84 cents, or 1.15%, to $74.04 a barrel while U.S. West Texas Intermediate (WTI) crude rose 77 cents, or 1.13%, to $69.04 a barrel. Both benchmarks fell 1.5% on Wednesday.
The market saw support after data on Thursday showed China’s oil refinery throughput in May rising 15.4% from a year earlier, hitting its second highest total on record.
Chinese demand for oil is seen continuing to rise at an assured rate during the second half of the year, Kuwait Petroleum Corporation’s (KPC) chief executive said on Thursday.
But a weak economic outlook weighed, as China’s industrial output and retail sales growth in May missed forecasts.
Also capping price gains were fears that higher interest rates would slow economies in the United States and Europe, and lower oil demand.
The U.S. Federal Reserve left interest rates unchanged on Wednesday but signalled at least half of a percentage point increase to borrowing costs by the end of this year.
The European Central Bank is expected to increase the deposit rate by 25 basis points to 3.5% later in the day, the highest level in 22 years, and leave the door open to further hikes.
Meanwhile, the Bank of England is set to make its monetary policy decision on June 22, with UK interest rates expected to rise above those in the United States this year.
Analysts, however, expect oil prices to see support later in the year as voluntary cuts by OPEC+ countries implemented in May, and from Saudi Arabia in July, coincide with robust demand.
