Oil prices pulled back on Monday after touching two-year highs on expectations of improved demand and OPEC producers keeping supply curbs in place.
Prices retreated from session highs early, and analysts cited pressure from Chinese data showed crude oil imports fell to a year’s low in May.
“That took away some of the enthusiasm that the oil bulls had seen,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Brent crude settled at $71.49 a barrel, falling 40 cents after hitting $72.27 a barrel, its highest since May 2019.
U.S. West Texas Intermediate settled at $69.23 a barrel after touching $70 for the first time since October 2018.
Investors may have sold some contracts to take profits when WTI hit the round number of $70, said Jim Ritterbusch of Ritterbusch and Associates.
“Regardless, fresh highs suggest sustainability of this bull move with some higher values likely lying ahead,” Ritterbusch said.
Crude has risen for two weeks, with Brent up by 38% this year and WTI rising 43%, helped by nascent recovery from pandemic-related demand disruptions and supply curbs by the Organization of the Petroleum Exporting Countries and allies.
The producer group known as OPEC+ has boosted oil prices by sticking to supply restraints through July. On Monday, OPEC Secretary General Mohammad Barkindo said OPEC+ expects inventories to fall further in coming months.
Analysts expect oil prices to remain buoyant, with pullbacks brief, due to increased global demand following decisions by the United States and Europe to loosen COVID-19 restrictions, while India has begun to ease its latest lockdown.
“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