Oil prices rose in early Asian trade on Thursday, paring sharp losses over the past two sessions, after industry data showed an unexpected drop in U.S. crude stockpiles last week.

Brent crude futures rose 45 cents, or 0.6%, to $74.67 a barrel by 0023 GMT, while U.S. West Texas Intermediate crude futures were at $70.84 a barrel, up 45 cents, or 0.6%.

Both crude benchmarks settled down on Wednesday, closing at their lowest levels since Oct. 2 for a second day in a row.

The benchmarks are down 6-7% so far this week after the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency cut demand forecasts for 2024 and 2025.

Prices have also fallen as risk premiums have cooled with fears having eased that a retaliatory attack by Israel on Iran could disrupt oil supplies, though uncertainty remains over conflict in the Middle East.

"We are now playing a waiting game for two things. Firstly the China NPC standing committee to flesh out the details and the size of the fiscal stimulus package which I believe is coming," Tony Sycamore, IG market analyst in Sydney, said.

Investors are waiting for further details from Beijing on its broad plans announced on Oct. 12 to revive its ailing economy.

"The second is Israel’s response to Iran. It’s coming, we know that but we don’t know when," Sycamore said, adding that both factors bring upside risks for crude oil.

In the U.S., crude oil and fuel stocks fell last week, market sources said, citing American Petroleum Institute figures on Wednesday, against expectations of a build-up in crude stockpiles.

Crude stocks fell by 1.58 million barrels in the week ended Oct. 11, the sources said on condition of anonymity. Gasoline inventories fell by 5.93 million barrels, and distillate stocks fell by 2.67 million barrels, they said.

Ten analysts polled by Reuters estimated on average that crude inventories rose by about 1.8 million barrels in the week to Oct. 11. [EIA/S]

The Energy Information Administration, the statistical arm of the U.S. Department of Energy, will release its data at 11:00 a.m. EDT (1500 GMT) on Thursday.

Also supporting oil prices, the European Central Bank is likely to lower interest rates again on Thursday, the first back-to-back rate cut in 13 years, as it shifts focus from cooling inflation in the euro zone to protecting economic growth.