Oil prices on Monday fell away from last week’s multi-year highs as a relentless rise in US drilling activity pointed to increased output, while resistance emerged in Europe and Asia to US sanctions against major crude exporter Iran.
Brent crude futures were at $76.79 per barrel, down 33 cents, or 0.4%, from their last close, Reuters reported.
US West Texas Intermediate WTI crude futures were at $70.44 a barrel, down 26 cents, or 0.3%.
Brent and WTI last week reached their highest since November 2014 at $78 and $71.89 per barrel respectively, as markets expect Iran’s oil exports to fall significantly once US sanctions bite later this year.
“Around a million barrels of oil a day is likely to disappear from global oil markets if the US sanctions on Iran bite,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
“But it is still far from certain that they will bite in the way intended ... Germany has said it will protect its companies from US sanctions. Iran has said French oil giant Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the US.”
Beyond US sanctions, high oil prices come amid an already tight oil market due to record Asian demand and voluntary output restraint aimed at propping up oil prices led by the Organization of Petroleum Exporting Countries OPEC, as well as a group of non-OPEC producers, including Russia.
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