Investing.com - Oil prices were lower on Tuesday, pulling back from the prior session’s three-month highs as risk appetite waned after the latest trade figures out of China added to concerns over the health of the world's second-biggest economy.
Exports plunged 25.4% from a year earlier in February, far worse than forecasts for a decline of 12.5% and the worst monthly performance since May 2009, while imports dropped 13.8%, compared to expectations for a fall of 10.0%.
That left China with a surplus of $32.6 billion last month, down from $63.3 billion in January, the General Administration of Customs said.
The disappointing data reinforced the view that the economy remains in the midst of a gradual slowdown which will require Beijing to roll out more support in coming months.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
On the ICE Futures Exchange in London, Brent oil for May delivery shed 17 cents, or 0.42%, to trade at $40.67 a barrel by 09:10GMT, or 4:10AM ET.
A day earlier, London-traded Brent futures soared to $41.04, a level not seen since December 9, before giving back some gains to close at $40.84, up $2.12, or 5.48%, as continued hopes major oil producers will discuss a potential output freeze lifted prices.
Brent futures are up by roughly 30%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
A meeting is planned later this month in which producers will discuss the details of the proposed action.
Elsewhere, crude oil for April delivery on the New York Mercantile Exchange dipped 18 cents, or 0.47% to trade at $37.72 a barrel. On Monday, New York-traded oil futures rallied to $38.11, the most since January 4, before settling at $37.90, up $1.98, or 5.51%.
Monday’s gains came amid indications U.S. shale oil drillers are cutting back on production and on the growing view that a 20-month-long market rout is finally coming to an end.
Since falling to 13-year lows at $26.05 on February 11, Nymex oil prices have rebounded by approximately 33% as a decline in U.S. shale production boosted sentiment.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share, driving down prices by more than 70% over the past 20 months.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $2.95 a barrel, compared to a gap of $2.94 by close of trade on Monday.