Oil prices bounced back on Thursday after dropping by more than a dollar a barrel the previous day, supported by stronger fuel demand data from the United States, the world's top oil consumer, Trend reports with reference to Reuters.
Brent crude futures rose by 56 cents, or 0.7%, to $76.97 a barrel by 0330 GMT, while U.S. crude futures rose 53 cents, also up 0.7%, to $73.09.
A sharper-than-expected drop in U.S. gasoline inventories boosted prices, reflecting stronger demand for transport fuels in the U.S.
However, investors remained cautious as rising global interest rates continued to drive recessionary fears.
"Brent crude prices have managed to regain some footing lately from previous oversold technical conditions, but progress has somewhat stalled with unresolved (global) banking jitters putting sentiment in check," said Yeap Jun Rong, a market strategist at IG.
Ongoing downside risks to global growth conditions could squeeze prices into a range moving forward, with the need for a more concrete catalyst for another push higher, said Yeap.
The latest U.S. data showed consumer prices rose in April, increasing the likelihood that the Federal Reserve will maintain higher interest rates, which can have the knock-on effect of reducing oil demand.
Meanwhile, U.S. gasoline inventories fell by 3.2 million barrels last week, more much more than the 1.2 million barrel draw forecast by analysts, the latest data from the U.S. Energy Information Administration showed.
Distillate stocks also declined, while U.S. jet fuel demand rose to its highest level since December 2019.
Still the uncertain economic backdrop clouds prospects going forward, said analysts at ANZ.
"While U.S. inflation eased more than expected in April, there are fears the impact of recent rate hikes is only now surfacing in the U.S. economy," the ANZ analysts said, adding bearish sentiment continues to permeate commodities markets amid lacking signs of stronger demand.
Meanwhile, investors are also eyeing detailed talks on raising the U.S. government's $31.4 trillion debt ceiling that kicked off on Wednesday, with Republicans continuing to insist on spending cuts.
The standoff has rattled investors, sending the cost of insuring exposure to U.S. government debt to record highs, as Wall Street grows more concerned about the risk of an unprecedented default.