Oil retreated below $125 a barrel on Monday in volatile trade that saw it briefly hit an all-time high earlier in the session.
United States light crude, down more than $2 at one point, rallied to a new record of $126,40 a barrel, but by 4.17pm GMT it was $1,04 down at $124,92.
London Brent crude futures, whose nearby contracts have moved into contango, fell $1,78 down to $123,62.
A contango structure suggests plentiful supplies and if sustained, could imply lower prices. Brent had been in backwardation, where prompt prices are higher than those further forward and is associated with limited availability of oil.
The dollar fell against the euro on renewed concerns the Federal Reserve could still have to cut interest rates to boost growth. It had risen a full percent against the yen and approached a two-month high against a basket of currencies earlier on Monday.
Separately, data released by China showed that crude oil imports fell 3,9% in April from a year earlier, the first decline in 18 months, after refiners slashed purchases from March’s record high and stepped up refined fuel imports.
”We sold off on the Chinese import data, which suggested prices at these levels are weighing on demand. But we’ve pared those losses,” said Eric Wittenauer at AG Edwards.
”Time and again, this highly resilient market has sold off only to recover and hit new highs.”
Oil has jumped about 13% since slipping to $110,53 a barrel on May 1, as investors seized on supply disruptions in the North Sea and Nigeria, and galloping demand for distillate fuels, notably diesel. — Reuters