Oil turns higher as China attempts to dispel wave of pessimism

Oil prices turned higher on Thursday after China’s central bank sought to rein in a rising wave of pessimism over the country’s real estate market and broader economy.

Prices fell at the previous session, fuelled by fears about fuel demand being affected by a major real estate crisis that was hampering the driving force in China’s economy and the possibility of further raising interest rates in the United States.

Brent crude futures rose 71 cents, equivalent to 0.85%, to $84.16 per barrel, while U.S. West Texas Intermediate crude rose 70 cents, equivalent to 0.9%, to $80.08 per barrel by 1214 GMT.

Both crude futures suffered losses of about half a percentage point at the start of Asian trading on Thursday.

Interest rates also remain in focus after the minutes of the Federal Reserve’s July meeting were released on Wednesday. The minutes of the meeting showed that central bank officials did not provide strong signs of stopping rate hikes in efforts to prioritize inflation control.

Raising interest rates increases borrowing costs for companies and consumers, which could slow economic growth and reduce oil demand.

Data released Wednesday showed U.S. crude oil inventories fell about 6 million barrels last week due to strong export operations and the pace of refineries’ operation.