Oil prices rose on Wednesday, driven by expectations of sustained summer demand from the world's two largest consumers, the US and China, although the rise was limited by analysts' caution regarding the overall economic situation, UNN reports with reference to Reuters.
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Prices fluctuated in a narrow range, as signs of sustained demand, driven by increased passenger traffic in the Northern Hemisphere in summer, competed with fears that US tariffs on goods from trading partners would slow economic growth and fuel consumption.
Brent crude futures rose 13 cents, or 0.2%, to $68.84 a barrel at 04:11 GMT (07:11 Kyiv time). US West Texas Intermediate crude futures rose 25 cents, or 0.4%, to $66.77.
This reversed a two-day decline, as the market downplayed the likelihood of supply disruptions after US President Donald Trump's threat to impose tariffs on Russian oil purchases.
Major oil producers point to signs of improving economic growth in the second half of the year, while data from China show steady growth.
"High seasonal demand is currently driving oil prices higher, as summer travel and industrial activity peak," LSEG analysts noted in their post.
"Increased gasoline consumption, especially in the US during the Independence Day celebrations, signals high fuel demand, helping to offset the negative impact of rising inventories and tariff concerns," the note said.
Data from China showed a slower-than-expected growth in the second quarter, partly due to pre-purchasing to circumvent US tariffs. This eased some concerns about the economy of the world's largest oil importer.
The data also showed that China's oil throughput in June increased by 8.5% compared to the same period last year, indicating an increase in fuel demand.
However, some analysts considered the price increase temporary.
The stabilization of the oil market after two volatile sessions was largely the result of a moderate technical correction, rather than any significant changes in fundamental factors, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"Investors should monitor expectations for inflation and interest rates in the US, as Trump's persistent push for broader tariffs could lead to inflation and reduced fuel demand in the medium term," she added.
Sachdeva noted that OPEC's forecast remains more optimistic, pointing to the cartel's monthly report published on Tuesday, which predicts an improvement in the global economy in the second half of the year, boosting oil demand prospects.
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Brazil, China, and India are outperforming expectations, while the US and EU are recovering from last year, she added.
"Technical indicators may provide short-term relief, but overall the market lacks momentum," Sachdeva added.
"Until there is clarity on global growth, policy directions, and a recovery in real demand, especially from Asia, the oil market seems to be drifting sideways," she pointed out.