WASHINGTON (dpa-AFX) - Oil prices traded higher on Thursday as rate cut optimism helped offset a mixed set of economic activity data from China.
Benchmark Brent crude futures rose half a percent to $80.18 a barrel, while WTI crude futures were up 0.6 percent at $77.42.
Both benchmarks fell more than 1 percent on Wednesday after official data showed an unexpected increase in U.S. crude inventories in the week ended August 9th - suggesting as easing in the summer-travel demand.
Traders are now betting on the prospect of improving fuel demand through lower interest rates.
Amid signs of slowing inflation, traders are now gravitating slightly more towards a 50-basis point Fed rate cut in September over a 25-bps cut.
Geopolitical risk continues to hang over the oil market, but it is still unclear how and if Iran will retaliate against Israel.
On Tuesday, U.S. President Joe Biden said that Iran might refrain from attacking Israel if a cease-fire deal is reached in Gaza.
Negotiations over a Gaza cease-fire and hostage release deal will resume in Doha, Qatar today but militant group Hamas said it will meet with mediators only if it receives a 'clear commitment' from Israel on its latest proposal.
Meanwhile, China concerns lingered after the release of mixed economic activity data for July.
China's retail sales rebounded in July while industrial production growth slowed and new home prices fell at the fastest pace in nine years, highlighting an uneven recovery in the world's second-largest economy.
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