(Bloomberg) -- Oil steadied after a two-day gain as optimism over a revival in Chinese demand was balanced by concerns over tighter US monetary policy.

Most Read from Bloomberg

• Sorry, Twitter. Elon Found His Next Shiny Object.

• How to Get a Free Flight to Hong Kong in 500,000 Airline Ticket Giveaway

• World’s Rich Take Advantage as $1 Trillion Property Market Craters

• Lightfoot Is First Chicago Mayor to Lose Reelection in 40 Years

• Musk Was Right About Tesla Rivals Losing Billions

West Texas Intermediate traded near $78 a barrel after adding almost 3% over the previous two sessions. Chevron Corp. Chief Executive Officer Mike Wirth said rising Chinese demand may aid prices. Amin Nasser, Wirth’s counterpart at Saudi Aramco, said consumption in the Asian country was “very strong.”

Crude shipments from the US, meanwhile, rose to a record last week, suggesting buoyant overseas demand, according to official figures released Wednesday. The increase in flows helped to reduce the expansion in nationwide stockpiles, which grew by a less-than-expected 1.2 million barrels.

Oil has softened slightly this year on a challenging global macroeconomic outlook, with the Federal Reserve signaling that it’ll need to push rates higher to rein in inflation. That’s overshadowing signs that Chinese demand will recover after the biggest oil importer abandoned Covid Zero late last year.

“The big picture is that crude has become locked in a narrow band, once again, with no major impetus to move prices sustainably higher or lower,” said Vandana Hari, founder of Vanda Insights in Singapore. “It’s a waiting game on China, as well as the global economy.”

Widely-watched time spreads are also signaling renewed strength in the market, with the prompt spread for global benchmark Brent — the gap between the two nearest contracts — at its widest since late November. The differential was 64 cents a barrel in backwardation, up from 14 cents a month ago.

Russian oil flows also remained in focus after Moscow said it would cut crude production this month in retaliation for sanctions and price caps on its oil exports. The Kremlin said it would be pragmatic when deciding on future output, and that its actions would depend on market developments.

Elements, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here.

Most Read from Bloomberg Businessweek

• Microsoft Expands Game Pass as Regulators Fret Over Activision Deal

• Russian Airlines Are Flying High Despite Sanctions

• Gina Raimondo Becomes China Player in a Job Where Her Predecessor Used to Nap

• This Road Could Save the Planet—and Carve Up Alaskan Wilderness

• The NFL’s Top Talent Agency Bought by Venture Investors

©2023 Bloomberg L.P.