Oil prices fell on Monday, after hitting a two-year peak above $72, on pressure from a possible increase in Iran’s exports, but the recovery in demand and supply restrictions from OPEC + provided some support.
Demand is increasing in the United States and Europe, with the easing of restrictions related to Covid-19, and India is easing its isolation measures in another step that may boost fuel consumption.
OPEC and its allies adhered to agreed production restrictions until July, and Brent crude fell 62 cents, or 0.9 percent, to $ 71.27 by 0920 GMT, after hitting earlier at $ 72.27, the highest level since May 2019.
US West Texas Intermediate crude touched $70, for the first time since October 2018, but reversed direction to trade down 66 cents, or 0.8 percent, to $69.07.
“With some improvement in pandemic conditions in India and recovery in the United States and China, while Europe remains on the path, there should be an appetite for buying crude with every drop,” said Jeffrey Haley, an analyst at brokerage Oanda.
Crude has risen over the past two weeks, and Brent is up 37 percent since the start of the year, thanks to supply restrictions imposed by OPEC and its allies, and demand partially recovering from the collapse caused by the pandemic.
Iran and world powers will start a fifth round of talks on June 10 in Vienna, which may include the United States lifting economic sanctions on Iranian oil exports.