Crude oil prices fell back on Wednesday as investors returned their focus to the grim economic backdrop and took profits after the sharp gains in previous sessions.
Trading was expected to be limited with U.S. markets closed for the Independence Day holiday, and ahead of meetings of European Central Bank and the Bank of England policy makers scheduled for Thursday.
Brent crude oil was 49 cents lower at $100.18 per barrel by 1011 GMT, after jumping more than 3 percent in the previous session on short-covering before the U.S. holiday.
U.S. crude fell 55 cents to $87.11 after settling on Tuesday at its highest close since May 30.
“After a strong rally yesterday, with the U.S. liquidity out of the market, the market is moving to a level that is easier to defend,” said Filip Petersson, analyst at SEB in Stockholm.
“I expect it to be a bit bearish, but a 1 percent fall after several days with several percent rises is not a big move.”
Brent crude was trading as low as $88.49 on June 22.
Tuesday’s gain in the price of oil was supported by expectations for more monetary policy stimulus.
Risk assets such as commodities and stocks have also been supported by hopes for more monetary stimulus to boost slowing economic growth.
China’s services firms grew at their slowest rate in 10 months in June, easing back from May’s 19-month peak, bolstering expectations that Beijing will deliver further measures to drive growth.
The European Central Bank is expected to cut its main refinancing rate to a record low below 1 percent at its policy meeting on Thursday. Investors are also hoping for action from the U.S. Federal Reserve.
However, the weak data was also seen as limiting the prospects for demand growth for commodities like oil.
Deutsche Bank and Societe Generale have lowered their 2013 Brent price outlooks on expectations of weak demand due to the gloomy economic climate.
U.S. crude oil stocks fell more than expected last week, according to data released by industry group the American Petroleum Institute, helping to support prices.
Crude inventories tumbled by 3 million barrels in the week to June 29, well above the 1.9-million-barrel drawdown forecast by analysts, with Gulf Coast stocks off nearly 4.3 million barrels.
Wednesday’s U.S. holiday pushes back the U.S. Energy Information Administrations inventory data to 11 a.m. EDT (1500 GMT) on Thursday.
Also supporting prices, Norwegian trade unions put off a decision to escalate a strike by offshore oil and gas workers until Friday, extending their battle with employers to nearly two weeks.
Norway labour union Industri Energi said it did not expect easy talks with employers, as meditation over an oil strike were to resume later on Wednesday.