Oil rises amid demand concerns

Oil rose alongside broader financial markets after falling nearly 7 percent in the previous two sessions on signs that the demand outlook is worsening.

Global benchmark Brent approached 80 dollars per barrel after closing below that threshold for the first time since July on Wednesday. US crude was near 76 dollars. Stocks in Asia rose after US stocks climbed for an eighth day on Wednesday, marking their longest winning streak in nearly two years on optimism that US interest rates have peaked.

Oil prices have seen a sharp decline over the last three weeks, driven by growing concerns over weak demand. The focus has returned to fundamentals as refining margins fall and inventories rise in China, the largest importer. Data released on Thursday showed that Asia's largest economy has returned to deflation.

Supply from the Middle East, the source of about a third of the world's crude oil, has remained unaffected for more than a month following the tensions. Russian shipments are hovering near a four-month high. Industry data in the US showed that crude inventories rose by about 12 million barrels last week, but official data from the Energy Information Administration will not be released until next Wednesday.

Charu Chanana, a market strategist at Saxo Capital Markets Pte., said that demand concerns are currently driving market sentiment. "Macro data from both the US and China, as well as EIA inventory data, will play a key role in the near term to assess the impact of high interest rates on oil demand," Chanana said.