By Peter Nurse
Investing.com -- Crude oil prices edged lower Monday, easing back from record highs following disappointing Chinese import data as investors await talks between Iran and world powers later in the week.
By 9:05 AM ET (1305 GMT), U.S. crude was down 0.3% at $69.42 a barrel, after earlier touching $70 for the first time since October 2018. Brent was down 0.3% at $71.66, after hitting a two-year high above $72 a barrel.
U.S. Gasoline RBOB Futures were down 0.4% at $2.2025 a gallon.
Crude has risen for the past two weeks, with both contracts up around 40% 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.
However, traders banked some profits Monday after crude oil imports into China, the largest importer in the world, fell 14.6% year-on-year in May.
“This suggests that Chinese refiners are reluctant to import at these higher prices, and instead prefer to draw down inventories,” said analysts at ING, in a note. “Clearly, if we see Chinese refiners taking a step back from imports, this would be a bearish development for the market.”
Adding another degree of caution, a fresh set of talks between Iran and global powers in Vienna over a nuclear accord are set to start on Thursday. A successful conclusion could include Washington lifting economic sanctions on Iranian oil exports, potentially resulting in 500,000 to 1 million barrels of crude per day reentering the global market.
Still, the overall tone within the market remains positive, with investors expecting fuel demand to surpass supplies in the second half of 2021 even if OPEC+ is gradually easing the supply cuts.
Energy giant BP (NYSE:BP) sees a strong recovery in global crude demand and expects it to last for some time, according to Chief Executive Officer Bernard Looney.
“There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney told Bloomberg News Monday. “I think that the situation we’re in at the moment could last like this for a while.”
The latest positioning data shows that speculators increased their net longs in ICE (NYSE:ICE) Brent by 8,830 lots over the last reporting week, to leave them with a net long of 267,282 lots as of last Tuesday.