© Reuters. FILE PHOTO: An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS/File Photo

By Natalie Grover

LONDON (Reuters) -Global oil benchmark hovered above $80 on Wednesday, buoyed by China’s pledge to reinvigorate economic growth and expectations that the U.S. Federal Reserve will stop raising interest rates soon.

Brent futures were up 64 cents at $80.27 a barrel by 1226 GMT, while U.S. West Texas Intermediate (WTI) crude was up 44 cents to $76.19 per barrel.

China’s top economic planner pledged on Tuesday it would roll out policies to “restore and expand” consumption in the world’s second-largest economy, which could boost oil demand.

In the U.S., a report on Tuesday showed retail sales rose by less than expected in June, boosting expectations the Federal Reserve will stop hiking rates after a widely expected 25 basis-point increase at its July 25-26 meeting.

Higher interest rates increase borrowing costs and can slow economic growth and reduce oil demand.

In another positive sign, European Central Bank (ECB) governing council member Klaas Knot on Tuesday suggested that rate hikes beyond next week’s meeting were “by no means a certainty”.

Meanwhile, the latest inflation data out of Canada and the United Kingdom that show signs of cooling have also lifted sentiment.

“Traders have started to become a lot more optimistic as inflation eases off…any improvement in the inflation data also means an improvement in oil demand,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.

On the supply side, data from the American Petroleum Institute (API), an industry group, showed , gasoline and distillate inventories all fell last week.

PVM analyst John Evans said one of the main reasons behind the market’s benign opening was the API report, with the expectant crude draw of 2.3 million barrels turning into a mere 800,000 barrels.

“Those of us expecting some fireworks … are sorely disappointed as it lands with a bit of a whisper rather than a bang,” he said.

Meanwhile, Russia is set to reduce its oil exports by 2.1 million metric tons in the third quarter, in line with planned voluntary export cuts of 500,000 barrels per day in August, according to the energy ministry.