LONDON, Jan 16 Reuters Oil prices held near this year39;s highs on Monday as easing COVID restrictions in China raised expectations for a demand recovery in the world39;s top crude importer.

Brent crude fell 38 cents, or 0.45, to 84.90 a barrel by 1012 GMT, while U.S. West Texas Intermediate crude was down 26 cents, or 0.33, at 79.60 a barrel, amid thin trade during Monday39;s U.S. public holiday.

Both contracts rose more than 8 last week, the biggest weekly gains since October after China abandoned what remained of its zeroCOVID policy by reopening its borders on Jan. 8.

China39;s crude imports rose 4 year on year in December, while an expected resurgence in travel for the Lunar New Year holiday at the end of the week raised the outlook for demand for fuels used in transport.

Traffic levels in China are rebounding from record lows after the easing of COVID19 restrictions, resulting in stronger demand for crude and oil products, ANZ analysts said in a note.

But new reports over the weekend highlighting an increase in COVID19 deaths weighed on sentiment.

While China39;s outlook has turned a corner, it must be noted that the normalisation of its oil demand will be gradual … As things stand, China39;s oil recovery remains anticipated rather than realised, PVM analyst Stephen Brennock said.

Meanwhile, the Organization of the Petroleum Exporting Countries and the International Energy Agency will release their monthly reports this week, closely watched by investors…