Hello,

The air is denser and cooler at nights. that's the correct reason. cooler air to the engine means better mileage and better performance although marginally. At night the temperature is less so the air is dense which means more Oxygen per volume of air and hence better combustion so a better ride.

Now, cold air is denser than warm air, so in cold weather the number oxygen molecules entering the combustion chamber per unit volume of air is significantly greater than when the temperature is high. More oxygen provides better combustion, and hence a noticeable increase in power.

Hope this helps!!!