Oil held the bulk of a near 2% gain made Wednesday on signs of rising demand in Asia and a US industry report showing lower stockpiles.

West Texas Intermediate for August traded above $72 a barrel. Emerging demand from refiners in China, Japan and Southeast Asia has bolstered prices of Middle Eastern oil, pointing to tighter market balances.

US stockpiles dropped by more than 1 million barrels last week, according to people familiar with data from the industry-funded American Petroleum Institute. Official supply-and-demand figures are due later on Thursday.

Oil is headed for a small monthly increase as China, the world’s largest crude importer, takes steps to shore up its economy. Additional support for crude has come from the Organization of Petroleum Exporting Countries and its allies, with the cartel agreeing to curb production in a bid to revive prices.

Expectations for further measures from China “continue to underpin expectations for demand recovery,” said Charu Chanana, market strategist for Saxo Capital Markets Pte in Singapore.

Traders were also weighing commentary from Federal Reserve Chair Jerome Powell, who warned that further interest-rate increases were likely warranted to quell inflation. Still, Fed Reserve Bank of Atlanta President Raphael Bostic said he supports holding the target-rate level for the rest of 2023.

While “Powell reiterated the case for two more rate hikes, other Fed members last night sounded dovish, relieving demand concerns,” said Chanana.

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