Oil futures lost ground Tuesday, with pressure tied to a positive tone for the U.S. dollar but the outlook for demand remains positive.
West Texas Intermediate crude for July delivery fell 63 cents, or 0.9, to 68.60 a barrel on the New York Mercantile Exchange. August Brent crude the global benchmark, fell 67 cents, or 0.9, to 70.82 a barrel on ICE Futures Europe.
A previous price surge that was probably premature, coupled with a stronger U.S. dollar and a correction on the stock markets, are weighing on oil prices, said Eugen Weinberg, commodity analyst at Commerzbank, in a note.
Oil ended lower Monday after an initial jump that saw the U.S. benchmark touch 70 a barrel for the first time in more than 2 12 years.
The ICE U.S. Dollar Index a measure of the currency against a basket of six major rivals, was up 0.2. A stronger dollar can weigh on commodities priced in the currencies, making them more expensive to users of other currencies.
A slowdown in Chinese crude oil imports was cited as a factor in Mondays weakness.
On the supply side meanwhile, observers are beginning to accept that it will take some time yet before Iranian oil exports return to the market, Weinberg said, noting remarks by U.S. Secretary of State Antony Blinken, who said it was unclear if Iran was willing to comply with the conditions of the 2015 nuclear agreement.