LONDON - Oil steadied on Tuesday as investors took profit on last week's rally above three-year highs, with prices supported by growing concern over the potential for supply disruptions.
Brent crude oil futures were up 11 cents at $71.53 a barrel by 1418 GMT, having come off an earlier high of $71.89, while U.S. crude futures were largely flat at $66.19.
"The rally upwards was purely on geopolitical risk and if now we haven't had any further stimulus, we're seeing prices slip off a bit," Natixis commodities strategist Joel Hancock said.
"If we were going to see a move higher, we'd have to see some sort of macro stimulus as the fundamentals right now are pretty mixed."
Brent has risen 1.5 percent so far this month. It hit a peak of $73.09, the highest since late 2014, on mounting tensions in the Middle East, the possibility of renewed U.S. sanctions against Iran and falling output in Venezuela, where economic crisis has cut oil output to multi-year lows.
"With so many potential supply disruptors in play and few signs that the current market upheaval will end any time soon, traders continue to pay the geopolitical risk premium," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
"Oil prices should remain bid ... at least through the Iran nuclear deal deadline (May 12) if not for the remainder of 2018," he added.
U.S. President Donald Trump has threatened to pull out of a nuclear deal between Iran and six major powers by May 12 unless Congress and European allies help "fix" it with a follow-up agreement.
If Washington does not renew sanctions relief for Tehran at this point, Iran may have difficulty exporting its crude.
Healthy demand and coordinated crude supply cuts by the Organization of the Petroleum Exporting Countries and several partners including Russia have made oil one of the top-performing commodities of 2018, with a gain of 8 percent, after wheat and corn, which have gained nearly 10 percent.
However, the physical markets, particularly in the Atlantic Basin, are suffering from seasonal weakness that has pulled some grades to multi-month lows.
The American Petroleum Institute publishes weekly U.S. fuel inventory data later on Tuesday, while official government data, including on production, is due from the EIA on Wednesday.