LONDON: The Brent crude oil benchmark hovered above $80 a barrel on Thursday, with demand concerns and a waning war-risk premium having triggered a selloff over the past week.
Brent crude futures were up $1, or about 1.3%, at $80.54 a barrel by 1445 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.01, also about 1.3%, to $76.34.
The uptick comes after both benchmarks dropped to their lowest since mid-July on Wednesday as worry over possible supply disruptions in the Middle East eased and concern over U.S. and Chinese demand intensified.
Brent is nearly $20 a barrel lower than its September peak.
"It might be that this near-oversold status is causing a hiatus in selling this morning," said John Evans of oil broker PVM, adding that there was little positive news overnight and that the week's earlier losses reduced the impact of the latest Chinese data.
Thursday's data from China suggested that the fight against disinflation in the face of weak demand remains a challenge for the country's policymakers.
Chinese consumer prices swung lower in October as key gauges of domestic demand pointed to weakness not seen since the pandemic while deepening factory-gate deflation cast doubts over the chances of a broad-based economic recovery.
Earlier in the week customs data showed that China's total exports of goods and services contracted faster than expected.
Demand indicators aren't looking rosy in the United States either. U.S. crude oil inventories increased by 11.9 million barrels over the week to Nov. 3, sources said, citing American Petroleum Institute figures.
If confirmed, this would represent the biggest weekly build since February. The U.S. Energy Information Administration (EIA), however, has delayed release of weekly oil inventory data until Nov. 15 for a system upgrade.
On the bright side, global markets were upbeat on Thursday on the belief that major central banks are now done with rate hikes. High interest rates raise the cost of borrowing, dampening demand for everything, including oil.
Both OPEC and the International Energy Agency (IEA) are due to offer their view on the state of oil demand and supply fundamentals next week.
Since last month's reports, higher output is expected to emerge from Venezuela after relaxation of U.S. sanctions, said Callum Macpherson, head of commodities at Investec, also highlighting a deterioration in the demand outlook.
"There is a danger the market could be in a surplus next year even if the Saudis do extend their cuts beyond the end of December," he said.
OPEC is set to meet at the end of the month to discuss output policy for 2024.