Oil prices were steady on Tuesday as investors weighed strong holiday travel in China that could boost fuel demand against the prospect of rising interest rates elsewhere, slowing economic growth.

Brent crude rose 4 cents to US$82.77 a barrel at 0345 GMT, while US West Texas Intermediate crude gained 6 cents to US$78.82 a barrel.

Oil futures had risen more than 1% on Monday on optimism that holiday travel in China would increase fuel demand in the world’s second-biggest economy.

Bookings in China for trips abroad during the upcoming May Day holiday point to a continued recovery in travel to Asian countries. Still, the numbers remain far off pre-Covid levels, with long-haul airfares soaring and not enough flights available.

“Investors expressed optimism that Chinese holiday travel would boost fuel demand in the world’s largest oil importer,” said Leon Li, an analyst at CMC Markets.

“In addition, expectations for a slowdown in US gross domestic product growth in the first quarter prompted a pullback in the US dollar index. DXY yesterday, supporting gains in oil prices.”

A weaker US dollar can help global demand for oil by making it cheaper for holders of foreign currencies in other countries.

However, investors remain wary about central banks in the United States, Britain and the European Union potentially raising interest rates to curb inflation, which could slow economic growth and dent energy demand.

The US Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May.

Investors on Tuesday awaited industry data on US oil stockpiles. Analysts polled by Reuters expected the data to show US crude inventories fell by about 1.7 million barrels in the week to April 21.

US government data on inventories is due on Wednesday.