US consumer prices posted the smallest monthly gain in more than a year on Tuesday, indicating the worst of inflation has likely passed and sparking hopes the Fed will ease the pace of its interest rate rises. West Texas Intermediate futures slipped toward US$75 a barrel, while global benchmark Brent dipped.

China is ramping up vaccination efforts as the nation rapidly dismantles its Covid Zero policy, which has weighed on its economy this year. A surge in virus cases has raised concerns about near-term energy demand, but the easing of restrictions is expected to boost commodity consumption in the long term.

Crude is still on track for its first back-to-back quarterly decline since 2019 on concerns about the global economy. Goldman Sachs Group Inc trimmed its oil price forecasts for early next year due to a weak outlook, while Opec reduced estimates for the amount of crude it will need to pump in the coming months.

“Opec signalling a slightly less-tight market balance across the first quarter of 2023” is weighing on the outlook, said James Whistler, the managing director of Vanir Global Markets Pte. “We see upside from here, particularly with supply side issues such as a delay in the Keystone restart and Russian price caps.”