Oil backs off five-week high on economic concerns

Oil prices fell in European trade for the first session in four off five-week high on profit-taking, and amid renewed concerns about the global economy's weakness and its impact on fuel demand.

Such decline comes ahead of initial US inventory data later today from the American Petroleum Institute. 

Global Oil Prices

US crude fell 2.5% to $70.17 a barrel, with a session-high at $71.99, while Brent tumbled 2.2% to $74.76 a barrel, with a session-high at $76.58. 

US crude rose 0.2% on Monday, the third profit in a row, marking a five-week high at $74.92, while Brent added 0.5% to $78.68 a barrel, the highest since May 2. 

Global oil prices surged after Saudi Arabia announced a voluntary production cut by a million bpd for a month in July. 

Economic Cocnerns

Latest US data showed a steep decline in US services PMI during May.

European data also showed an unexpected tumble in German factory orders in April, renewing concerns about the health of the euro zone's largest economy. 

It'll depend on upcoming inflation data now which will decide the path forward for monetary policies in both the US and Europe and will determine the likely path ahead for growth in both regions.

API

The American Petroleum Institute will release initial data on US crude stocks today, with analysts expecting the second weekly buildup in a row.