Brent crude futures fell 17 cents, or 0.2%, to $83.86 a barrel by 0119 GMT, while U.S. West Texas Intermediate (WTI) crude futures slipped 12 cents, or 0.2%, to $78.27.
Brent has jumped 6.7% so far this week and WTI is up 6.2%, recouping most of the previous week’s losses.
Analysts said recent Chinese crude purchases and a pick-up in road traffic fuelled confidence in a demand recovery in the world’s second-largest economy following the reopening of its borders and easing of COVID-19 curbs after protests last year.
“Given the focus on energy security, we anticipate that Chinese imports will continue to pick up, particularly as refinery runs ramp and stockpiling crude remains a strategic priority,” RBC commodity strategist Michael Tran said in a client note.
In another encouraging sign, ANZ analysts said a congestion index covering the 15 Chinese cities with the highest number of vehicle registrations had risen 31% from a week earlier.
“China’s road traffic levels are continuing to rebound from record low levels following the easing of COVID-19 restrictions,” the ANZ analysts said in a note. Oil prices have also been buoyed by a slide in the dollar to a nearly nine-month low after data showed U.S. inflation fell for the first time in 2-1/2 years, reinforcing expectations the Federal Reserve will slow the pace of rate hikes.
A weaker greenback tends to boost demand for oil as it makes the commodity cheaper for buyers holding other currencies.
