Oil prices retreat from $126 a barrel record

"China's imports of oil and oil products were very high in March, and if that was strong again that would signal that that part of the market remains fundamentally strong and supportive of the oil price," he said.

Many analysts believe the dollar's protracted decline over the past year has much to do with the doubling in oil prices since May of last year. Another school of thought thinks growing demand in rapidly developing countries such as China, Brazil and India, is the primary factor driving oil higher.

In other Nymex trading, heating oil futures were flat at US$3.636 a gallon (3.8 liters) while gasoline prices fell 0.62 cent to US$3.195 a gallon. Natural gas futures rose 7.3 cents to US$11.61 per 1,000 cubic feet.

June Brent crude dropped 48 cents to US$124.92 a barrel on the ICE Futures exchange in London.