Oil prices lost more than 2% as the coronavirus crisis in India intensified and the United States resumed work on the disrupted pipeline.
This loss curbed the wave of rising oil prices in recent days, pushing crude to an eight-week high, driven by expectations of the International Energy Agency and OPEC for a recovery in global demand later this year.
Brent crude fell $1.75, or 2.5%, to $67.57, and US West Texas Intermediate crude fell $1.80, or 2.7%, to $64.28 a barrel.
Fears of inflation have also surfaced, as Chinese Premier Li Keqiang urged the country to deal effectively with rising commodity prices and their impact, according to a government TV report.
Inflation concerns continued to dominate the broader markets, although US equity futures erased a previous loss.
In the United States, the Colonial pipeline, a major source of fuel for the east coast of the country, has returned to service after a cyber attack disrupted it last Friday.
This is a relief to motorists after panic buying emptied some gas stations and prices exceeded $3 a gallon.
Oil is among a number of commodities that have risen sharply this year, as investors bet that an economic recovery from the coronavirus outbreak will stimulate consumption.
The International Energy Agency said in its monthly report that the supply glut resulting from the pandemic has vanished. Nevertheless, the growing number of coronavirus infections in many parts of Asia, particularly India, continues to outweigh consumption expectations.
While the Colonial pipeline has been restarted, fuel shortages remain. The Biden administration raised a mandate to exclusively use U.S. ships to help ease the gasoline supply crisis.
The International Energy Agency said in its monthly report yesterday that oil demand already exceeds supply, and that it expects the gap to increase even more if Iran raises exports.
The previous day, OPEC adhered to its forecast of a strong return to global demand for oil in 2021, with the impact of growth in China and the U.S. dominating the impact of the Coronavirus crisis in India.