Oil prices make gains but concern about demand remains

London — Oil prices rose on Thursday but were unable to claw back much of this week’s more than 8% decline as demand concerns in major consuming countries continued to have an effect.

Brent futures were up 73c, or 1.01%, to $73.06 a barrel by 9.57am GMT. US West Texas Intermediate (WTI) crude rose 49c, or 0.71%, to $69.09, after falling earlier in the session to $63.64, the lowest since December 2 2021.

Prices have plunged this week on concerns about the US economy and signs of weak manufacturing growth in the world's largest oil importer China, sliding further after the US Federal Reserve raised interest rates on Wednesday. That capped near-term economic growth prospects.

However, the market has seen some support from the Fed’s signal that it may pause further interest rate increases to give officials time to assess the fallout from recent bank failures and to gain clarity on the dispute over raising the US debt ceiling.

“With the Fed possibly pausing, the debt ceiling hopefully resolved this month, the Opec+ cut felt in a few weeks' time and global demand picking up in the second half of the year, we are growing in conviction that the question is not how low oil prices will fall, but how long,” oil broker PVM's Tamas Varga said.

Opec+ started voluntary output cuts at the beginning of May.

Russia’s deputy prime minister, Alexander Novak, said on Thursday the country was abiding by its voluntary pledge to cut oil output by 500,000 barrels per day (bpd) from February until the end of the year.

Investors are also awaiting developments from the European Central Bank, which is set to raise interest rates for the seventh meeting in a row on Thursday.

Reuters