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Brent crude futures slipped 18 cents, or 0.2%, to $84 a barrel
by 1102 GMT, while U.S. West Texas Intermediate futures eased 12
cents, or 0.1%, to $79.62 a barrel. Both benchmarks had risen
nearly $1 in earlier trading.
Data from China showed consumer inflation in March rising at its
slowest pace since September 2021, suggesting demand weakness
persists amid an uneven economic recovery, which spurred some
expectations that Beijing could take steps to boost growth.
"China's March CPI is lower than expected, which may promote the
Chinese government to further stimulate the economy," said Tina
Teng, an analyst at CMC Markets.
Crude futures also climbed as the dollar eased on hopes that the
U.S. Federal Reserve is getting closer to ending its rate hike
cycle. A weaker greenback makes oil cheaper for those holding
other currencies.
"With more central banks pausing rate hikes, such as the Reserve
Bank of Australia, Bank of Korea ... the expectation for the Fed
to further scale back its tightening policy has been
strengthened," Teng added.
A U.S. inflation report to be released on Wednesday could help
investors gauge the near-term trajectory for interest rates.
"The short-term crude demand outlook will soon be clearer. This
week, we will find out if the U.S. economy is taking steps into
the recession pool or if it is going to do a cannonball into
it," said Edward Moya, senior analyst with OANDA.
"Wall Street should have a strong handle on the trajectory of
the economy after it gets a pivotal inflation report."
Oil futures have climbed more than 5% since the Organization of
the Petroleum Exporting Countries (OPEC) and allies including
Russia surprised the market last week with a new round of
production cuts starting in May.
On the U.S. supply front, industry data on U.S. crude stockpiles
is due on Tuesday. Five analysts polled by Reuters estimated on
average that crude inventories fell by about 1.3 million barrels
in the week to April 7.
(Additional reporting by Sudarshan Varadhan, Stephanie Kelly and
Trixie Yap; editing by Sonali Paul and Jason Neely, Kirsten
Donovan)
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