Oil continued rising on Thursday, after US economic figures suggested that fears of an impending recession in the world’s largest economy might be mitigated, the rally was tempered by worries about reduced global demand.

Data revealed that U.S. retail sales exceeded expectations in July, and a separate report indicated a smaller than anticipated rise in the number of Americans applying for unemployment benefits.

Brent crude added 1.2% at $80.68 per barrel while US WTI advanced 1.2% to $77.93 per barrel.

Both benchmarks dropped over 1% on Wednesday following an unexpected increase in U.S. crude inventories.

Earlier, data indicating a moderate rise in U.S. consumer prices for July bolstered market support by reinforcing expectations that the Federal Reserve might lower interest rates next month.

Oil prices were also supported by concerns over disruptions in the Middle East from the previous month.

However, analysts at ANZ noted in a client report that gains in oil inventories raised concerns about weaker demand. U.S. crude oil stockpiles increased by 1.4 million barrels for the week ending August 9, contrary to expectations of a 2.2 million barrel draw, marking the first build since late June.

China's factory output growth slowed in July, and refinery production dropped for the fourth straight month, highlighting the uneven pace of the country's economic recovery and restricting the market's potential gains.