Oil prices drifted lower on Tuesday as there was some profit taking after recent rally on hopes for demand pickup and amid signs that producers are cutting output as promised.
Global benchmark Brent crude declined 0.7 percent to $34.58 a barrel, after earlier hitting its highest level since April 9.
U.S. West Texas Intermediate crude futures were down 0.6 percent at $31.46 a barrel, after having risen to as high as $33.44 earlier in the session, its highest since March 16.
As prices hover near two-month high, investors await today’s and tomorrow’s inventory data releases for direction.
There is growing optimism that the easing of global (coronavirus) lockdowns will help boost economic activity and fuel demand.
That said, further upside is expected to be limited due to higher oil stocks and constraints around U.S. supply.
OPEC+ has cut its oil exports sharply in the first half of May and more voluntary cuts are expected in June.
Analysts expect U.S. shale to cut production deep in Q2 due to the low demand, high inventories, and low oil prices.