Oil prices declined on Thursday after reaching three month highs as China reported stronger-than-expected exports in May fueling fears of a demand increase larger than global supply availability.

International benchmark Brent crude was trading at $123.23 per barrel at 0651GMT for a 0.28% decrease after closing the previous session at $123.58 a barrel.

American benchmark West Texas Intermediate (WTI) was at $121.72 per barrel at the same time for a 0.32% drop after the previous session closed at $122.11 a barrel.

Oil prices declined after Energy Information Administration (EIA) data showed, US commercial crude oil inventories rose by 2 million barrels to 416.8 million barrels, against the market expectation of a drop of 1.8 million barrels.

As China returns to everyday life, new lockdown measures introduced in parts of Shanghai on Thursday continue to push oil prices down.

Meanwhile, drop in oil prices is limited by data from China's export sector. China increased its exports by 16.9% compared to last year as COVID-19 cases dropped and restrictions eased allowing some factories to restart.

As the summer months approach, fuel demand in the US is expected to increase with the peak of travel season and push oil prices higher.

By Zeynep Beyza Kilic

Anadolu Agency

energy@aa.com.tr