LONDON—Oil edged higher on Thursday, though gains made on signs of a strong economic rebound in top crude importer China were kept in check by fears over the impact of potential increases to European interest rates.
Brent crude futures rose 43 cents, or 0.51 percent, to $84.74 a barrel by 1017 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 45 cents, or 0.58 percent, at $78.14.
Manufacturing activity in China grew at the fastest pace in more than a decade last month, data showed on Wednesday, adding to evidence of a rebound in the world’s second-largest economy after removal of strict COVID-19 curbs.
China’s seaborne imports of Russian oil are set to hit a record high this month as refiners take advantage of cheap prices.
However, the market was pressured by growing expectations of rate increases by the European Central Bank (ECB) after faster than expected acceleration in consumer prices in France, Spain, and Germany.
Eurozone inflation rose to a higher than expected annual rate of 8.5 percent in February, according to a first estimate from the EU’s statistics agency.
“Resurfacing inflation worries contributed to the souring mood,” said PVM Oil analyst Tamas Varga. “Persistent inflation anxiety will act as a break on a prolonged rally in the immediate future.”
In the United States, a tenth consecutive week of crude stock builds also weighed.
Record exports of U.S. crude oil, however, kept the build smaller than in recent weeks, the Energy Information Administration said.
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