Oil prices held in a narrow range on Tuesday, though the outlook for demand was clouded by a weak manufacturing activity survey from China, and a warning from the head of the International Monetary Fund that the global economy faced a tough year ahead.
Brent crude futures recovered from their early weakness, when prices fell by $1 a barrel, rebounding to $86.29 a barrel by 07:37 GMT, an increase of 38 cents, or 0.44%. U.S. West Texas Intermediate crude was at $80.77 a barrel, up by 51 cents, or 0.64%.
The weak factory survey from China, the world's largest crude importer and second-largest oil consumer, was a bearish factor. The Caixin/Markit manufacturing purchasing managers' index fell to 49.0 in December from 49.4 in November. The index has stayed below the 50-point mark that separates growth from contraction for five straight months.
This followed news of a larger-than-expected increase in the first batch of oil product export quotas for 2023 released by China's government. A handful traders attributed that to expectations of poor domestic demand as the country continued to battle waves of COVID-19 infections.
Oil prices had settled more than 2% higher on Friday, with Brent and WTI ending 2022 up 10.5% and 6.7% on a year before, respectively.
