Oil prices rose on Thursday amid “Gulf tensions” and a big fall in US crude stocks, but gains were capped as weak Western manufacturing data indicated slowing economic growth and in turn the potential for reduced fuel demand.
Brent crude futures rose 36 cents or 0.6% to $63.54 a barrel by 0855 GMT, after dropping 1% on Wednesday - the first fall in four sessions.
US West Texas Intermediate crude was up 31 cents, or 0.6%, at $56.19 a barrel, having dropped 1.6% in the previous session.
US crude stocks fell by nearly 11 million barrels last week, the Energy Information Administration reported on Wednesday, well above analysts' expectations for a drop of 4 million barrels.
"While that draw was influenced by temporary factors - Hurricane Barry - US crude inventories have plunged by 40 million barrels over the last six weeks, suggesting the oil market is finally rebalancing," UBS analyst Giovanni Staunovo said.
Oil prices have also been under pressure from concerns about global economic growth amid growing signs of harm from the US-China trade war that has rumbled on over the last year.
However, the White House said on Wednesday top US and Chinese negotiators would meet next week to continue talks, and global equities edged up on the news.
There are also tensions in the Middle East following the seizure of a British-flagged tanker in the Gulf by Iranian forces last week.
