SINGAPORE (Reuters) - Oil prices on Monday fell away from last week’s multi-year highs as a relentless rise in U.S. drilling activity pointed to increased output, while resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran.
Still, crude prices remained near more than three-year-highs reached last week as markets expect Iran’s oil exports to fall significantly once U.S. sanctions bite later this year.
Brent crude futures LCOc1 were at $76.79 per barrel at 0229 GMT, down 33 cents, or 0.4 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $70.51 a barrel, down 19 cents, or 0.3 percent.
Brent and WTI last week reached their highest since November 2014 at $78 and $71.89 per barrel respectively.
“Around a million barrels of oil a day is likely to disappear from global oil markets if the U.S. 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 U.S. 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 U.S.,” he said
The renewed sanctions 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 the Petroleum Exporting Countries (OPEC), as well as a group of non-OPEC producers including Russia.
“The U.S. decision to