Oil climbs Thursday on improved oil demand from the US, the world’s largest oil consumer.

A barrel of European reference crude, Brent, goes for USD 76.98 on Thursday morning, against USD 76.17 on Wednesday afternoon. US West Texas Intermediate simultaneously goes for USD 73.08, up from USD 72.30.

A sharper-than-expected drop in US gasoline inventories boosted prices, reflecting stronger demand for transport fuels in the US, writes Reuters.

Investors remains cautious, however, as global rise in interest rates keep fanning fears of recession.

”Brent crude prices have managed to regain some footing lately from previous oversold technical conditions, but progress has somewhat stalled with unresolved (global) banking jitters putting sentiment in check,” said Yeap Jun Rong, a market strategist at IG, to Reuters.

While US inflation eased more than expected in April, fear is mounting that the effects of most recent interest rate spikes are beginning to surface in the US economy, says a group on analysts from Australian bank ANZ, according to Reuters.

Meanwhile, US oil inventories dropped by 3.2 million barrels last week, greatly exceeding analyst projections of 1.2 million barrels, the latest data from the US Energy Information Administration showed.