Oil prices traded mostly flat on Thursday, giving up gains made earlier in the day, as optimism over China's demand outlook was tempered by caution ahead of upcoming inflation data from the United States.
Brent crude was flat at $82.67 per barrel as of 0725 GMT, while U.S. West Texas Intermediate crude fell 4 cents, or 0.05%, to $77.37 per barrel.
Both benchmarks had risen 3% in Wednesday's session, boosted by hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output.
"China is speeding up stockpiles for crude oil ahead of the Lunar New Year holiday, as the demand outlook has been improved amid a U-turn in its COVID policy," said Tina Teng, an analyst at CMC Markets.
Top oil importer China is reopening its economy after the end of strict COVID-19 curbs, boosting optimism that demand for fuel will grow in 2023.
Its industrial output is expected to have grown by 3.6% in 2022 from the previous year, the Ministry of Industry and Information Technology said, despite production and logistics disruptions from COVID-19 curbs.
China's outbound flight bookings surged but even so were at only 15% of pre-pandemic levels in the week after the country announced it would reopen its borders, travel data firm ForwardKeys said on Thursday.
Upcoming U.S. inflation data, however, is a key risk factor for oil, CMC Market's Teng added. That is leading traders to become cautious ahead of the data release on Thursday.
Economists are expecting the rise in core U.S. consumer prices (USCPFY=ECI) to slow to an annual pace of 5.7% in December, versus 6% a month earlier. Month-on-month headline inflation is seen at zero (USCPI=ECI).
The market is also bracing for additional curbs aimed at Russian fuel products sales set to come into force in February as the European Union (EU) keeps working on more sanctions against Moscow over the invasion of Ukraine.
