Oil Prices See Cautious Gains On China Demand Hopes

Oil prices rose on Wednesday after having fallen to a three-month low in the previous session amid the U.S. banking turmoil.

Benchmark Brent crude futures rose 0.6 percent to $77.89 a barrel, while WTI crude futures were up 0.7 percent at $71.80.

Optimism around China's economic recovery lifted prices after the Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for Chinese oil demand growth in 2023.

The cartel, however, left the global demand total steady, citing potential downside risks for world growth.

A slew of data released earlier today confirmed the recovery in China was well on track.

Chinese retail sales rebounded in the first two months of 2023 and fixed investment grew at a much faster-than-expected clip, while factory activity expanded slightly slower than expected and the jobless rate increased, according to data by the National Bureau of Statistics.

The dollar index was up slightly in European trade as investors kept a close eye on the developments surrounding the SVB crisis and awaited more U.S. economic data for cues on the Federal Reserve's monetary policy path.

Overnight data showed U.S. consumer price inflation eased slightly last month, spurring hopes of a smaller rate hike at the conclusion of next week's FOMC meeting.

The official crude oil inventory report from the U.S. Energy Information Administration may influence trading later in the day.

Earlier, data from the American Petroleum Institute showed a crude inventory build, but larger-than-expected draws in gasoline and distillate inventories.

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