LONDON: Global oil prices fell on Wednesday as many traders banked recent gains made on forecasts of stronger demand, analysts said.
The market was also hit by expectations of rising crude inventories in top oil consuming nation the United States, and weak economic data from Asian powerhouse China.
In early afternoon deals, Brent North Sea crude for March shed 20 cents to $108.07 per barrel.
New York's main contract, West Texas Intermediate (WTI) for delivery in March, fell 10 cents to $96.63 a barrel.
"Following the sharp two-day rally, both the Brent and WTI crude oil contracts were in consolidation mode," said Forex.com analyst Fawad Razaqzada.
"The brighter demand outlook for crude oil has been dampened somewhat by expectations that US crude oil inventories may have increased sharply last week."
The US government's Energy Information Administration (EIA) will publish later its report on American oil inventories for the week to January 17.
The report is traditionally issued on Wednesday, but will be given on Thursday owing to a US public holiday on Monday.
The market pulled lower on Thursday as traders also reacted to downbeat Chinese data.
Chinese manufacturing contracted for the first time in six months in January, a survey showed Thursday, casting a pall over growth prospects for the world's second-largest economy this year.
Banking giant HSBC's preliminary reading of China's purchasing managers' index (PMI), which tracks manufacturing activity in factories and workshops, fell to 49.6 in January, the lowest since August.
"Brent pulled back ... as weak PMI data from China, falling for the first time in 6 months to 49.6 caused demand concerns," added analyst Lucy Sidebotham at British energy consultancy Inenco.
The oil market had zoomed to its highest levels so far this year on Wednesday, buoyed by upbeat forecasts from the International Energy Agency (IEA) and the International Monetary Fund (IMF).
New York crude had soared to $96.73 per barrel on Wednesday, its highest point since the start of 2014.
The IMF lifted its prediction for global economic growth on Tuesday by 0.1 percentage point to 3.7 percent for 2014.
The optimistic outlook is fuelled by solid growth in the United States as other countries also move away from austerity budgets.
The Paris-based IEA also raised its forecast of global oil demand, which is dependent on the strength of the world economy.
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