Oil prices rose in early trade on Thursday, reversing the previous session's losses, buoyed by stronger-than-expected economic data from the world's top oil consumers and signs of easing trade tensions.

Brent crude futures rose 27 cents, or 0.39%, to $68.79 a barrel at 0000 GMT. U.S. West Texas Intermediate crude futures were up 31 cents, or 0.47%, at $66.69. Both benchmarks fell more than 0.2% in the previous session.

U.S. crude inventories fell by 3.9 million barrels to 422.2 million barrels last week, the Energy Information Administration said on Wednesday, a steeper decline than forecasts for a 552,000-barrel draw, suggesting stronger refinery activity, tighter supply, and increased demand.

There is "some support from the favorable margin environment associated with the refining sector. Product spreads remain relatively wide in all the regions," said John Paisie, president of Stratas Advisors.

However, larger-than-expected builds in gasoline and diesel inventories capped price gains.

The U.S. central bank's latest snapshot of the economy, released on Wednesday, showed activity picked up in recent weeks. However, the outlook was "neutral to slightly pessimistic" as businesses reported that higher import tariffs were putting upward pressure on prices.

China data showed growth slowed in the second quarter, but not by as much as previously feared, in part because of front-loading to beat U.S. tariffs, easing fears over the state of the world's largest crude importer's economy.

The data also showed that China's June crude oil throughput was up 8.5% from a year ago, implying stronger fuel demand.

Additionally, "support has come from the positive news pertaining to some easing of trade tensions between China and the U.S. with President Trump lifting the ban on the sale of AI chips to China along with the announcement of a trade deal with Indonesia," John Paisie added.

U.S. President Donald Trump offered fresh optimism about the prospects of a deal with Beijing on illicit drugs. He also hinted that a trade deal with India is very close, while an agreement could possibly be reached with Europe as well.

Trade tariffs could slow down global economic growth, and in turn dampen fuel demand, putting downward pressure on prices.

Source: Reuters