LONDON: Brent crude gained on Wednesday after China said it would boost energy imports this year, though the marker oil held well below a near four-year high set last week as Iran's offer of talks with major powers eased concerns about supply disruption.
Front-month Brent gained 72 cents to $122.70 a barrel by 1245 GMT, after settling $1.82 lower at $121.98 in the previous session.
It was well below a high above $128 per barrel set last week, a level last hit in July 2008.
China's trade ministry said it plans to boost energy imports in 2012, and will keep policies to ensure stable export growth, which it expects to improve in the second half of the year.
China's plans on energy imports reinforce a view that Asian demand will continue to support oil prices, even as demand from developed economies is seen as sluggish.
US oil gained 41 cents to $105.11 a barrel after settling $2.02 lower at $104.70.
US President Barack Obama said an announcement of six-power talks with Iran offered a diplomatic chance to defuse a crisis over its nuclear programme and quieten the "drums of war."
"It was getting quite worrying but tensions have eased and it's looking more like both sides could come out of this without losing face," said David Morrison, market analyst at GFT.
However, geopolitical risks remain a key focus for investors. France voiced scepticism the planned fresh talks between six world powers and Iran would succeed since Tehran still did not seem sincerely willing to negotiate on the future of its controversial nuclear programme.
Risks to supply from Iraq were also highlighted as a car bomb followed by an attack by a bomber wearing an explosive vest killed 12 people in the northern Iraqi town of Tal Afar, police said.
Norway's Statoil exited its involvement in Iraq, selling its stake in the giant West Qurna oilfield to Lukoil.
More signs emerged that demand for oil was vulnerable as investors braced for news on whether Greece would succeed in restructuring its huge debt pile, and evidence mounted of a weakening outlook for global economic growth.
Germany announced factory orders in January posted a surprise fall as demand slumped from outside the euro zone, adding to concerns about a slowdown in Brazil, Australia and China, though these regions are still experiencing growth.
And the US Energy Information on Tuesday (EIA) cut its world oil demand growth forecasts for both 2012 and 2013.
Investors will watch weekly inventory data from the EIA for further clues on the demand picture in the United States.
US crude oil inventories rose 4.6 million barrels last week, the industry group American Petroleum Institute said in a weekly report released late on Tuesday, far exceeding the expected rise.
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