Oil prices slipped in New York but held steady in London on Wednesday amid concerns that the eurozone debt crisis and another hike in Chinese interest rates could lower global energy demand.

New York's main contract, West Texas Intermediate for delivery in August, shed 24 cents to close at $96.65 a barrel.

In London, Brent North Sea crude for August delivery gained one cent to close at $113.61 a barrel, making up for losses earlier in the day.

"There were so many headwinds today to push crude lower ... and yet crude is still hanging in there," said Matt Smith, an analyst with Summit Energy.

"There's no data to support this general sentiment. It's just the market doesn't seem to want to move lower since it's passed the $96 level."

Oil prices initially dropped after Beijing hiked its main interest rate by 25 basis points, the third hike this year and the latest effort aimed at curbing inflation in China's fast-growing economy.

"The Chinese action in hiking interest rates ... has raised concerns of a hard landing for the Chinese economy," said Michael Hewson, an analyst with CMC Markets.

"This in turn could weigh on future demand which in turn has raised fears that the Chinese may be leaning too heavily on the brakes by doing this."

Separately, fears about Europe's simmering crisis weighed as traders continued to digest the impact of Moody's decision Tuesday to downgrade Portuguese government debt to junk status.

Traders are also looking ahead to the European Central Bank's rate-setting meeting on Thursday, in which the ECB is expected to raise its key interest rates by 25 basis points to 1.5 percent in a bid to curb inflation.

The ECB's move would likely slow European growth and in turn reduce energy demand.

channelnewsasia.com