Brent crude oil reached highest level since May 2019
Oil retreated having touched multi-year highs on Monday, as the eyes of investors turn to talks this week between Iran and other nations over a nuclear deal that could push supplies of crude oil.
Brent crude oil was down by 0.9% to just over $71.20 a barrel early this morning, having reached $72.27 hours before, its highest level since May 2019.
West Texas Intermediate crude for July reached $70 for the first time since October 2018, but turned around, and came back down to $69.10 a barrel, a fall of 0.8%.
It is possible that some investors sold their contracts to cash in on profits when WTI reached $70, Avtar Sandu, a senior commodities manager at Phillips Futures in Singapore, told Reuters.
“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,” Sandu said.
Figures showing that China’s crude oil imports fell in May by 14.6% compared to the year before could also have impacted prices.
Prior to today’s moves, both Brent and WTI rose over the past two weeks as fuel demand picks up in America and Europe as coronavirus restrictions are being eased in time for the summer.
Analysts have said that demand for oil across the world is expected to surpass supply in H2 of 2021 as OPEC+ implements an easing of supply cuts.
Support for the price of oil also came as talks between Iran and other nations over a nuclear deal stalled.
A fifth round of talks is expected to commence on June 10, while it has been reported that the US could lift economic sanctions on oil exports from Iran.
In America there has been a slowdown in the rate of growth of oil and natural gas rigs for the first time in six weeks, while the growth of drilling has also slowed.
CMC Markets analyst Kelvin Wong suggested that “U.S. oil drillers are less enthusiastic in adding more U.S. oil production and hence reduces the risk of a supply glut in the global oil market in H2 2021.”