Oil eased away from $70 this morning after shedding 2.4 per cent last week, with dealers weighing more positive signals from Iran on its atomic programme.
US light, sweet crude fell 35 cents to $69.53 a barrel this morning, snapping a three-day rising streak. Brent crude dropped 40 cents to $68.40 a barrel.
Oil slumped to a more than three-week low of $68.10 last Wednesday amid a commodities and equities sell-off sparked by inflation concerns, but it later recovered in tandem with other markets after a more dovish message from the Federal Reserve.
Although US growth worries may continue to niggle oil market speculators, most traders will be focused on Iran as they await its reaction to a package of incentives from global powers meant to end the months-long standoff over its atomic agenda.
Iranian Foreign Minister Manouchehr Mottaki yesterday said a "positive atmosphere" may help bridge the gap with world powers over its nuclear programme but did not say when Tehran would respond to the Security Council powers plus Germany.
Iranian President Mahmoud Ahmadinejad on Friday said the package was "a step forward", but he said Iran would not be concerned by possible sanctions if it rejected the June 6th offer.
The West believes Iran's uranium enrichment could be used to make nuclear weapons. Tehran says it is purely for power generation and civilian use.
Oil now sits in the middle of the $68-$73 range that has contained it since early May, pressured by worries about slowing growth and underpinned by real and threatened supply disruptions that pushed prices above $75 a barrel in April.