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Brent crude futures for October were at $84.09 a barrel at 1003
GMT, down 44 cents. Front-month Brent settled at its highest
since April 13 on Monday.
U.S. West Texas Intermediate crude futures were at $81.29 a
barrel, down 51 cents from the previous session's settlement,
which was its highest since April 14.
"Oil prices may face a correction risk as the markets may have
been overbought in the past month," said Tina Teng, an analyst
at CMC Markets.
PVM analyst Tamas Varga noted that for months, predictions have
been made that global oil demand will grow in the second half of
2023, versus the first half, in tandem with supply cuts to
reduce global oil inventories.
Recession worries made investors more cautious earlier in the
year, he said.
"Then July arrived and the mood has promptly changed," he added,
citing the action of central banks that has investors more
confident that a "soft landing" is achievable and recession
avoidable in major economies.
The latest figures from the United States - the world's biggest
fuel consumer - showed fuel demand rose to 20.78 million bpd in
May, the highest since August 2019. A Reuters poll also
estimated U.S. crude oil and gasoline stockpiles were expected
to have declined last week.
China, which has been grappling with a sluggish post-COVID
recovery, released additional policy guidelines on Monday -
though without concrete measures - to boost momentum, after
manufacturing activity fell for a fourth month in July.
Alongside hopes of burgeoning demand, this Friday's meeting of
the Organization of Petroleum Exporting Countries and allies,
known as OPEC+, is expected to see Saudi Arabia roll its
voluntary cuts through September, further tightening supplies.
In a conference on Monday, BP chief Bernard Looney presaged oil
demand growth continuing into next year, OPEC+ being
increasingly disciplined and the U.S. rig count falling.
"(This creates) a situation where you'd describe the outlook for
oil prices to be strong over the coming months and years."
(Reporting by Natalie Grover in London; Additional reporting by
Emily Chow in Singapore; Editing by Christian Schmollinger,
Sonali Paul and David Evans)
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