BEIJING, June 1 Reuters Oil prices rose on Thursday, reversing earlier losses, as a potential pause in U.S. interest rate hikes and the debt ceiling bill passing a crucial vote renewed optimism about further fuel demand growth in the world39;s biggest oil consumer.

Brent crude futures for August rose 55 cents, or 0.76 to 73.15 a barrel by 0640 GMT, while U.S. West Texas Intermediate crude WTI rose 46 cents, or 0.68, to 68.55 a barrel.

U.S. Federal Reserve officials on Wednesday pointed towards a potential rate hike skip in June that reversed market expectations of an imminent hike that could slow economic growth and weaken oil demand.

Additionally, the U.S. House of Representatives39; passage of a bill suspending the U.S. government39;s 31.4 trillion debt ceiling improved the chances of averting a disastrous government default.

Both benchmarks had fallen steeply in the previous sessions, with Brent down 5.6 and WTI dropping 6.3 as of the close on Wednesday, from last Friday.

Oil markets may have been oversold in the last two trading days due to the sluggish Chinese data and debt ceiling concerns. Sentiment rebounded amid the debt bills passage in the House, and the Feds rate hike pause signal also offered a rebounding opportunity, said Tina Teng, a markets analyst at CMC Markets in Auckland.

Demand indications from China, the world39;s biggest oil importer, are somewhat mixed this week.

Official government data on Wednesday reported factory activity contracted in…