Oil prices slipped in early trade on Tuesday, paring gains from the previous session, as investors weighed strong holiday travel in China that could boost fuel demand with the prospect of rising interest rates elsewhere slowing economic growth.
Brent crude fell 7 cents to $82.66 a barrel at 0013 GMT, while U.S. West Texas Intermediate crude eased 6 cents to $78.70 a barrel. Oil futures rose more than 1 per cent on Monday on optimism that holiday travel in China would increase demand in the world’s largest oil importer.
Bookings in China for trips abroad during the upcoming May Day holiday point to a continued recovery in travel to Asian countries. Still, the numbers remain far off pre-COVID-19 levels with long-haul airfares soaring and not enough flights available.
However, investors remain wary about central banks in the United States, Britain and the European Union potentially raising interest rates to curb inflation, which could slow economic growth and dent energy demand.
The U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May. Investors on Tuesday awaited industry data on U.S. oil stockpiles. Analysts polled by Reuters expected the data to show U.S. crude inventories fell by about 1.7 million barrels in the week to April 21. U.S. government data on inventories is due on Wednesday.