Brent crude futures slid 6 cents, or 0.1 per cent, to $85.27 a barrel by 1943 GMT, while U.S. West Texas Intermediate crude was down 10 cents, or 0.1 per cent, at $81.47 per barrel
Oil prices dropped on Wednesday after hitting seven-week highs as summer demand optimism and worries over escalating conflicts offset an industry report that said U.S. crude inventories unexpectedly rose.
Brent crude futures slid 6 cents, or 0.1 per cent, to $85.27 a barrel by 1943 GMT, while U.S. West Texas Intermediate crude was down 10 cents, or 0.1 per cent, at $81.47 per barrel.
Brent touched $85.84 a barrel earlier in the session, its highest since May 1, while West Texas Intermediate traded up to $81.96 a barrel, the highest level since April 30.
Trading activity was thin because of a U.S. federal holiday.
The current snapshot presents an underwhelming picture but there are green shoots that suggest a more optimistic outlook, according to Tamas Varga of oil broker PVM.
The Brent price being $8 over the lows reached in early June “shows genuine optimism that the global oil balance will eventually tighten,” Varga said.
The potential escalation of tensions in the Middle East is adding some supply risk to the oil demand equation, noted Bart Melek, head of commodity strategy at TD Bank, adding recent U.S. economic data supported bets the Fed would move towards reducing interest rates in coming months.
China data this week showed May industrial output lagged expectations, but retail sales, a gauge of consumption, marked the quickest growth since February.
Meanwhile, U.S. crude stocks rose by 2.264 million barrels in the week ended June 14, market sources said on Tuesday, citing API figures. Analysts polled by Reuters had anticipated a 2.2-million barrel draw in crude stocks.
