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Demand is rising in the United States and Europe as COVID-19
restrictions are loosened and, in another hopeful step for fuel
use, India is easing its lockdown.
OPEC and its allies are sticking to agreed supply restraints
through July.
Brent crude fell 62 cents, or 0.9%, to $71.27 by 0920 GMT, after
earlier hitting $72.27, the highest since May 2019. U.S. West
Texas Intermediate touched $70 for the first time since October
2018 but reversed course to trade down 55 cents or 0.8%, at
$69.07.
"With some improvement in the pandemic situation in India and
the recovery in the U.S., China and Europe remaining on track,
oil should remain a buy on dips," said Jeffrey Halley, analyst
at brokerage OANDA.
Crude has risen for the past two weeks, and Brent is up by over
37% this year, helped by supply curbs by the Organization of the
Petroleum Exporting Countries and allies and demand recovering
in part from the pandemic-induced collapse.
"The tailwind that oil prices are currently finding from
virtually all sides remains strong," said Eugen Weinberg of
Commerzbank, calling Monday's price correction "hardly
surprising" after recent gains.
Investors may have sold off some contracts when WTI hit $70,
said Avtar Sandu, a senior commodities manager at Phillips
Futures in Singapore. The chance of more Iranian supply, and a
drop in China's crude imports, also weighed.
"The primary concern is about Iranian barrels coming back into
the market but I don't think there will be a deal before the
Iranian presidential election," he said. The election is on June
18.
Iran and global powers will enter a fifth round of talks on June
10 in Vienna that could include Washington lifting economic
sanctions on Iranian oil exports.
(Reporting by Florence Tan; editing by Emelia Sithole-Matarise
and Jason Neely)
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