© Reuters. 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) -Oil prices crept up on Thursday after China’s central bank sought to stem the rising tide of pessimism over the country’s property market and wider economy.

Prices had fallen for the previous session on simmering worries over the impact on fuel demand from a deepening property crisis that is stifling momentum in China’s economy and from the potential for further increases to U.S. interest rates.

futures rose 60 cents to $84.05 a barrel by 1210 GMT and U.S. West Texas Intermediate crude (WTI) was up 61 cents at $79.99.

“Oil traders like the fact that China isn’t going to tolerate weakness in economic activity,” said Naeem Aslam at Zaye Capital Markets after China’s central bank said that it will adjust and optimise property policies in a timely manner.

Interest rates remain in focus, with minutes of the U.S. Federal Reserve’s July meeting released on Wednesday. The minutes showed the central bank’s officials did not give strong indications about pausing rate hikes in an effort to prioritise the battle against inflation.

Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.

“Crude prices are going to struggle here as we have bearish sentiment in the world’s two largest economies,” said OANDA analyst Edward Moya.

On a more bullish note, China made a rare draw on crude oil inventories in July, the first time in 33 months that it had dipped into storage.

Data released on Wednesday showed that {{8849|U.S. crcrude oil inventories fell by nearly 6 million barrels last week on strong exports and refining run rates. [EIA/S]

If the market had received that data in friendlier macroeconomic climes, the narrative of a tightening market would be at the top of news screens rather than today’s blight of financial considerations, said John Evans at oil broker PVM.

Oil looks like it will find a home around the $80 level as too many risks to the macroeconomic outlook still remain on the table, OANDA’s Moya added.