Crude prices rose towards $48 a barrel on July 15 after data from top energy consumers the U.S. and China boosted the oil demand outlook.

Gains were nevertheless capped by ongoing concerns that a persistent glut of crude oil and refined products could impede a price recovery.

Brent crude futures were up 45 cents at $47.82 a barrel at 8:00 a.m. CT (13:00 GMT), after earlier dropping to $46.65 a barrel. U.S. West Texas Intermediate (WTI) futures were up 42 cents at $46.10 a barrel.

U.S. retail sales rose more than expected in June as Americans bought vehicles and other goods, reinforcing views that economic growth picked up in the second quarter.

U.S. gasoline demand soared last year on sales of gas-guzzling vehicles following a sharp drop in oil prices.

China reported economic growth of 6.7% in the second quarter, slightly ahead of market expectations, reflecting government efforts to stabilise growth.

At the same time, China's domestic crude oil production in the first six months of 2016 fell 4.6% to its lowest level since 2010.

Bank of America Merrill Lynch said that global crude output was set to drop by 300,000 barrels per day in the third quarter of the year and forecast that Brent prices would rebound to $55 per barrel by the end of 2016.

"Unlike last year, when the market remained in a large and steady surplus, the global oil market is now about to move into a substantial deficit. As a result, we believe that the current seasonal headwinds will fade as we head into the winter," the bank said.

While the drop in prices over the last two years has led to a sharp fall in production, investors remain concerned about high levels of oil and refined products in storage.

U.S. gasoline stocks and European diesel inventories have risen in recent weeks despite entering the peak seasonal summer demand period.

"Inventories are high and we are in the withdrawal season. Things could get worse when we enter late August and September when inventories usually build," said Hamza Khan, head of commodities strategy at Netherlands-based ING Bank, which forecasts Brent to average around $40 a barrel in the third and fourth quarters of 2016.

BNP Paribas analysts said "very little implied global stock change will occur from third-quarter 2016 until the end of 2017."