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Brent crude was down 35 cents, or 0.5%, at $71.14 a barrel by
0921 GMT, after declining 0.6% on Monday. U.S. oil was off by 32
cents, or 0.5%, at $68.91 a barrel, having dropped by 0.6% in
the previous session.
"A previous price surge that was probably premature, coupled
with a stronger U.S. dollar and a correction on the stock
markets, are weighing on oil prices," Commerzbank said.
As oil is priced in dollars, a stronger greenback makes crude
more expensive for buyers with other currencies.
Also weighing on prices was data showing China's crude imports
were down 14.6% in May on a yearly basis.
"This deficit, however, is delusive because China was taking
advantage of low oil prices a year ago, so the base is
uncharacteristically high," oil brokerage PVM said.
Heavy Chinese refinery maintenance in May also contributed to
the decline.
Crude prices have risen in recent weeks, with Brent up by nearly
40% this year and WTI gaining even more, amid expectations of
demand returning as some countries succeed in vaccinating
populations against COVID-19.
Restraint on supply by the Organization of the Petroleum
Exporting Countries and allies has also helped buttress prices.
"The fundamental environment on the oil market remains
favourable: fuel demand is recovering strongly not only in the
United Sates, but also in Europe following the (partial) lifting
of restrictions," Commerzbank said.
In Britain, one of the most vaccinated countries in the world,
there are now doubts that the country will lift all coronavirus-related
restrictions as previously planned on June 21.
(Reporting by Aaron Sheldrick; Editing by Muralikumar
Anantharaman)
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