Global oil benchmark Brent hovered above $80 on Wednesday, buoyed by China’s pledge to reinvigorate economic growth and expectations that the U.S. Federal Reserve will stop raising interest rates soon.
Brent futures were up 64 cents at $80.27 a barrel, while U.S. West Texas Intermediate (WTI) crude was up 44 cents to $76.19 per barrel.
China’s top economic planner pledged on Tuesday it would roll out policies to “restore and expand” consumption in the world’s second-largest economy, which could boost oil demand.
In the U.S., a report on Tuesday showed retail sales rose by less than expected in June, boosting expectations the Federal Reserve will stop hiking rates after a widely expected 25 basis-point increase at its July 25-26 meeting.
Higher interest rates increase borrowing costs and can slow economic growth and reduce oil demand.
In another positive sign, European Central Bank (ECB) governing council member Klaas Knot on Tuesday suggested that rate hikes beyond next week’s meeting were “by no means a certainty”.
Meanwhile, the latest inflation data out of Canada and the United Kingdom that show signs of cooling have also lifted sentiment.
On the supply side, data from the American Petroleum Institute (API), an industry group, showed crude oil, gasoline and distillate inventories all fell last week