Oil prices climbed on Tuesday as optimism that government stimulus will eventually lift global economic growth and oil demand trumped concerns that renewed COVID-19 lockdowns are cooling fuel consumption.
Brent crude fell 45 cents, or almost 1 per cent, to US$54.65 a barrel by 0207 GMT, after dropping 2.3 per cent on Friday.
Oil prices fell more than two per cent on as concerns about Chinese cities in lockdown due to coronavirus outbreaks tempered a rally driven by strong import data from the world's biggest crude importer and US plans for a large stimulus package.
"Corona-induced economic fears, a stronger U.S. dollar and more pessimistic investor sentiment are all playing their part in the fact that Brent is trading. around US$3 lower than last Wednesday", said Commerzbank analyst Eugen Weinberg.
In the recent weeks, the benchmarks had rallied, buoyed by the commencement of Covid-19 vaccine rollouts and a voluntary crude output cut by major oil exporter Saudi Arabia. "Vaccination campaigns, although ongoing, are lagging the speed needed to fast-track a global recovery in the first quarter and the comeback for oil demand will be slow", said Rystad Energy's head of oil markets Bjornar Tonhaugen.
USA drillers added further pressure by putting more oil and natural gas rigs to work for an eighth consecutive week last week because rising prices have made production more profitable. Nonetheless, the variety of working rigs is lower than half of the extent of a yr in the past.
ANZ Research was quoted by the news agency as saying in a note that the USA drillers "have indicated they will continue to keep their spending under control".
Oil prices have also been supported by a drop in Libyan oil production, with the Waha Oil Company cutting production to 200,000 barrels per day due to maintenance of the main pipeline that connects the Al-Samah oil fields. and Al-Dhahra at the port of Es Sider.