Brent crude futures rose 21 cents, or 0.2 per cent, to $88.23 a barrel by 1245 GMT while US West Texas Intermediate crude futures were up 22 cents, or 0.3 per cent, at $83.03.
US economic growth slowed more than expected in the first quarter, but an acceleration in inflation suggested that the Federal Reserve would not cut interest rates before September.
US gasoline stockpiles fell by less than forecast and distillate stockpiles rose against expectations of a decline in the week to April 19, according to Energy Information Administration (EIA) data on Wednesday, reflecting signs of slowing demand.
"It does not exactly give a healthy state of domestic demand in the US," said John Evans of oil broker PVM.
US crude inventories unexpectedly fell sharply last week, the EIA report also showed, as exports jumped.
The concern about US fuel demand arises amid signs of cooling US business activity in April and as stronger-than-expected inflation and employment data means the Fed is seen as more likely to delay expected interest rate cuts.
"The current weakness in benchmark prices, after testing above $90 levels, is due to market sentiment refocusing on global economic headwinds over geopolitical tensions," said Emril Jamil, senior oil analyst at LSEG Oil Research.
Fighting in the Gaza Strip between Israel and Hamas is expected to expand as Israel may start an assault on Rafah, in the enclave's south, which may increase the risk of a wider war that could potentially disrupt oil supplies.
Still, oil supply has not been affected as yet and there have been no other signs of direct conflict between Israel and Hamas-backer Iran, a major oil producer, since last week.
Oil eases as US demand concerns outweigh Middle East fears
FE Team | Published: April 26, 2024 00:14:05
Oil eases as US demand concerns outweigh Middle East fears
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