Oil rises on China optimism, market shrugs off US inventory build

Oil prices rose on Thursday as hopes of a robust fuel demand recovery in top oil consumer China offset losses arising from strength in the greenback and a large build in US crude inventory. Brent crude futures rose 42 cents, or 0.5 per cent, to $85.80 per barrel by 0352 GMT, while US West Texas Intermediate (WTI) crude futures gained 48 cents, or 0.6pc to $79.07 a barrel. The International Energy Agency (IEA) said that oil demand will rise by two million barrels per day (bpd) in 2023, up 100,000 bpd from last month’s forecast to a record 101.9m bpd, with China making up 900,000 bpd of the increase. China will account for almost half of 2023 oil demand growth after relaxing its Covid-19 curbs, the Paris-based agency said. The US dollar, which generally moves inversely with crude prices, surged on the back of bullish US retail sales data and clung to most of those gains on Thursday. “On China, Opec and the IEA’s optimistic outlook helped. The net upward thrust countered the weight of the huge US oil stock-build, but I don’t see much more headroom just yet,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.