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Brent crude dipped 12 cents to $87.43 a barrel by 0955 GMT while
West Texas Intermediate crude (WTI) edged down by 21 cents to
$84.19.
Both benchmarks have been on a sustained rally since June, with
WTI trading at its highest this year on Thursday and Brent
hitting its highest price since January.
Oil prices have been boosted in recent days by extensions to
output cuts by Saudi Arabia and Russia, alongside supply fears
driven by the potential for tensions between Russia and Ukraine
in the Black Sea region to threaten Russian oil shipments.
"At present it does not appear that there is anything untoward
in the energy sector to upset this rally. Commentators and
traders alike are much concentrated on fundamentals rather than
what might be ailing the wider macroeconomic suite," said John
Evans of oil broker PVM.
"The poor state of China’s manufacturing, its property sector
and some stubborn world inflation stand out as issues that the
oil fraternity chooses to ignore at present."
All eyes are on July consumer prices data from the United States
on Thursday, which should provide a steer on the U.S. Federal
Reserve's future monetary policy.
"It will take something big for the Fed to consider hiking
again, you would think, having shifted to a more gradual
approach in recent months," said OANDA analyst Craig Orlam.
Also weighing on prices, U.S. crude inventories rose by 5.9
million barrels in the past week, eclipsing analyst expectations
in a Reuters poll for a rise of 0.6 million barrels, U.S. Energy
Information Administration data showed on Wednesday.
U.S. crude oil exports fell by 2.9 million barrels per day last
week, the steepest fall on record, data showed. But the market
is expecting crude exports to rise because of the U.S. crude
futures and Brent spread, said Phil Flynn, analyst at Price
Futures Group.
Meanwhile, recent data showed the consumer sector in China fell
into deflation and factory gate prices extended declines in
July, raising concerns about fuel demand in the world's
second-largest economy.
(Reporting by Natalie Grover in LondonAdditional reporting by
Muyu Xu in Singapore and Laura Sanicola in WashingtonEditing by
David Goodman)
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