SINGAPORE Oil prices rebounded in Asian trade after slumped to their lowest level this year in the previous session, despite concerns of economic slowdowns weakening fuel demand.
Brent crude futures were up 70 cents or 0.9 per cent at $77.87 per barrel by 0500 GMT, while U.S. West Texas Intermediate WTI crude futures rose 74 cents or 1.0 per cent to $72.75 per barrel.
On Wednesday, Brent was below the year's previous closing low of the previous closing low of the year, on the first day of 2022, while U.S. West Texas Intermediate crude had fallen to a new yearly low.
It could be an attempt to stabilise prices after the recent sell-off, but an overall cautious environment could still be in place, Jun Rong Yeap, market strategist at IG, told Reuters on Thursday.
He said that worries about demand would remain a key overhang for oil prices, while positive catalysts such as the supply-demand imbalance and China's reopening hopes have been short-lived.
U.S. crude production rose to 12.2 million barrels per day last week, its highest level since August, the Energy Information Administration said on Wednesday.
While U.S. crude stocks fell last week, gasoline and distillate inventories surged, adding to concerns about easing demand.
In the week, gasoline stocks grew by 5.3 million barrels to 219.1 million barrels, and distillate stocks, including diesel and heating oil, swelled by 6.2 million barrels, the EIA said.
Data showing Japan's economy shrank less than originally estimated in the third quarter helped lift oil prices.
Loosening COVID-19 restrictions in China, among the biggest crude oil consumers in the world, has aided in steadying oil prices.
After the G 7 and European Union have rolled out new restrictions on December 5, Western officials are in talks with Turkish counterparts to resolve oil tanker queues off Turkey, a British Treasury official said.
As operators race to adhere to Turkish rules, at least 20 oil tankers are facing delays to cross from Russia's Black Sea ports to the Mediterranean.