Investing.com -- Crude oil prices bounced Thursday on hints from China’s central bank of more help for the country’s struggling property sector, and thus the wider economy.
By 08:40 ET (12.40 GMT), the U.S. crude futures traded 1% higher at $80.20 a barrel, while the Brent contract climbed 1% to $84.28.
Both contracts had fallen to their lowest levels in two weeks earlier in the session, and are still on course for weekly losses over well over 2%.
PBOC plans to support the property sector
The crude markets have struggled of late on worries that Chinese growth was slowing rapidly amid trouble in its important property sector. This would likely translate into lower economic activity in the world’s second-largest economy, and largest oil importer, hitting demand for crude.
The People’s Bank of China responded to these signs of a slowing recovery from its COVID hit by marginally cutting key interest rates on Tuesday, and then earlier Thursday stated that it will adjust and optimize property policies in a timely manner.
Hawkish Fed weighs
Also weighing on the wider sentiment this week has been the perceived increased potential for further increases to U.S. interest rates.
The minutes of the U.S. Federal Reserve's July meeting, released on Wednesday, suggested the central bank's officials were still concerned over the battle against inflation, potentially leading to a further tightening of monetary policy.
Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.
Additionally, the hawkish Fed tone has boosted the U.S. dollar close to two-month highs, further pressuring crude prices.
Fundamentals remain constructive
“However, whilst there are broader market concerns, oil fundamentals remain largely constructive as continued OPEC+ supply cuts should ensure that we see sizable inventory draws for the remainder of the year,” said analysts at ING, in a note.
Evidence of these draws came on Wednesday, as data from the Energy Information Administration showed that U.S. crude oil inventories fell by nearly 6 million barrels last week.
(Ambar Warrick contributed to this article.)