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Crude prices were also pressured by the Iraq federal government
and Kurdistan Regional Government (KRG) taking a step towards a
resumption in northern oil exports from the Turkish port of
Ceyhan after they were halted last month.
Brent crude fell by 8 cents, or 0.1%, to $84.68 a barrel by 1115
GMT, giving up early gains. U.S. West Texas Intermediate lost 14
cents, or 0.2%, to $80.69.
"The next step may depend on global growth and whether the
economy can weather the recent storm, particularly in the U.S.,
where tighter credit could significantly weigh on growth for the
rest of the year," said Craig Erlam of brokerage OANDA,
referring to the oil price outlook.
Earlier in the session oil had found support from figures
showing that China's economy grew by a faster than expected 4.5%
in the first quarter and that oil refinery throughput rose to
record levels in March.
"As things stand, it's all systems go in China, much to the
relief of those betting on higher oil prices," said Stephen
Brennock of oil broker PVM.
But the prospect of another increase to U.S. interest rates,
which has been supporting the U.S. dollar, remained a drag on
sentiment. Traders expect the U.S. Federal Reserve to raise
rates by 25 basis points at its May meeting.
The dollar eased on Tuesday after earlier gains. A stronger
dollar makes commodities priced in the U.S. currency more
expensive for buyers holding other currencies.
Coming into focus on Tuesday will be the latest snapshot of U.S.
inventories. Analysts expect U.S. crude inventories to fall by
about 2.5 million barrels and also forecast declines in gasoline
and distillates.
The first of this week's two reports, from the American
Petroleum Institute, is due at 2030 GMT.
(Reporting by Alex LawlerAdditional reporting by Arathy
Somasekhar and Trixie YapEditing by David Goodman)
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