Oil prices rose on Thursday after signals of possible interest rate cuts by the US Federal Reserve and China revealing plans to stimulate growth in its struggling property market.

Brent crude futures rose by 0.5% to $80.98 a barrel and US West Texas Intermediate crude futures increased by 0.6% to $76.29, after falling by more than $2 a barrel in the previous session.

CMC Markets analyst Tina Teng told Reuters: “The immediate reason for an oil rebound is likely the market's expectations for rate cuts this year after Fed's Powell indicated 'a peak of the rate hiking cycle' in his speech.”

Despite Federal Reserve chairman Jerome Powell’s decision to keep rates steady for a fourth consecutive meeting, he expressed openness to cutting them in the coming months as inflation continues to fall and there is an expectation of continued job and economic growth.

Lower interest rates would stimulate demand in the economy and therefore boost oil demand, pushing up its price.

To counter the fallout from the liquidation of property developer Evergrande, China has set forth new property support measures.

Analysts at JP Morgan said China will remain the single largest contributor to global oil demand this year, forecasting that demand will grow by 530,000 barrels per day in 2024, after it increased by 1.2 million last year.

In a client note seen by Reuters, JP Morgan said: “Geopolitics aside, our view remains that 2024 will be fundamentally a healthy year for the oil market and we recommended using December's sell-off as a buying opportunity.”

Meanwhile, attacks by Yemen-based Houthi forces on shipping in the Red Sea are forcing vessels to reroute, driving up costs. Chevron recently announced that it would ship its oil exports to Asia via the Cape of Good Hope, rather than risk using the Middle East route.