Oil prices continued to climb on Thursday, recovering some of the losses from the previous session, amid hopes that a potential U.S. interest rate cut could boost economic activity and fuel demand. However, persistent concerns over a slowdown in global demand limited the gains.

Brent crude futures rose 17 cents, or 0.2%, to $79.93 a barrel by 00:29 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude gained 23 cents, or 0.3%, to $77.21 a barrel.

Both benchmark crude oils had fallen more than 1% on Wednesday following an unexpected rise in U.S. crude inventories and as fears of an escalation in Middle Eastern conflicts eased.

Yuki Takashima, an economist at Nomura Securities, stated, “We witnessed a correction in Asian trading as Wednesday’s selloff in the oil market was overdone.” He added that investors are betting on the Federal Reserve beginning to cut interest rates next month.

He continued, “However, oil prices are expected to remain under pressure in the coming period due to ongoing concerns about a global demand slowdown, particularly in China,” predicting that WTI could drop to around $72 in early August.

Data from the U.S. Energy Information Administration on Wednesday showed that U.S. crude inventories rose by 1.4 million barrels in the week ending August 9, contrary to expectations of a 2.2-million-barrel decline. This marks the first increase since late June.

Earlier this week, the International Energy Agency (IEA) lowered its oil demand growth estimates for 2025, citing the impact of a weaker Chinese economy on consumption. This followed OPEC’s reduction of its 2024 demand forecast for similar reasons.