Brent oil prices fell on Tuesday as fears that a global economic slowdown would reduce fuel demand prompted investors to take profits on the previous day's gains.
Traders are awaiting the minutes of the latest Federal Reserve meeting, due on Wednesday, after recent data on core inflation raised the risk of interest rates remaining higher for longer.
Brent crude was down 66 cents, or 0.8%, at $83.41 a barrel as of 0750 GMT. U.S. West Texas Intermediate crude (WTI) futures for March, which expire on Tuesday, were up 4 cents, or 0.1%, at $76.38.
WTI futures did not settle on Monday because of a public holiday in the United States.
The April WTI contract, currently the most active, was up 23 cents at $76.78.
"Brent is at the middle of the trading range since late December of between $78 and $88 a barrel, with some investors taking profits on concerns over more U.S. interest rate hikes while others kept bullish sentiment on hopes for a demand recovery in China," said Satoru Yoshida, a commodity analyst with Rakuten Securities.
"The market will likely remain in the tight range until there are more clear signs for the future direction of the U.S. monetary policy and the economic recovery path in China," he said.
With China's oil imports likely to hit a record high in 2023 and demand from India, the world's third-biggest oil importer, surging amid tightening supplies, all eyes are now on monetary policy in the United States, the world's largest economy and biggest oil consumer. Some analysts say oil prices could rise in the coming weeks because of undersupply and a demand rebound, despite the U.S. interest rate hikes.
"Chinese demand for Russian crude is back to the levels seen at the beginning of the war in Ukraine," said Edward Moya, an analyst at OANDA. "The West will try to pressure China and India from seeking alternative sources, which should keep the oil market tight," Moya said.
Russia plans to cut oil production by 500,000 barrels per day, or about 5% of its output, in March after the West imposed price caps on Russian oil and oil products.
While the Organization of the Petroleum Exporting Countries (OPEC) raised its 2023 global oil demand growth forecast this month, its monthly report showed crude oil output in January declined in Saudi Arabia, Iraq and Iran as part of the organisation's deal.
(Reuters - Reporting by Sudarshan Varadhan in Singapore and Yuka Obayashi in Tokyo; Editing by Jamie Freed, Christian Schmollinger and Kim Coghill)
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