Oil prices were hovering near $80 a barrel on Thursday, supported by hopes that interest rate hikes in the U.S. - the world's biggest oil consumer - may finally be slowing.
Data on Wednesday showed U.S. inflation rose at a slower pace in June, suggesting the Fed's interest rate hikes could finally be peaking. Markets expect one more rate hike before the Fed's rate cycle has likely hit its maximum.
Brent crude futures rose 22 cents to $80.33 per barrel while WTI crude futures gained 11 cents to $75.86.
In a report, the IEA predicted oil demand will hit a record high this year but weaker economic growth and rate hikes will temper the increase to be lower than expected. China's slower recovery is also weighing on demand as exports fell sharply in June.
However, China's crude imports rose 45.3% on-year in June to their second highest monthly level on record, supporting prices.
Another factor capping price gains was a big U.S. crude stock build of nearly 6 million barrels last week, more than analysts expected. Gasoline inventories remained largely unchanged during the 4th of July travel week, a highly unusual situation.
In summary, oil prices are hovering near $80 a barrel, supported by hopes that signs of cooling U.S. inflation and a peak in Fed rate hikes could boost fuel demand. However, China's slowing economy and higher US crude stockpiles are weighing on prices. While demand forecasts remain robust, risks from rate hikes and recession concerns cap significant upside for now.
