Oil guru expects summer price fall

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Neil McMahon at Bernstein Research said satellite tanker movement data had revealed that during the spring China had cranked up imports and hoarding in its strategic petroleum reserve.

That coincided with a surge in the oil price from below $50 to more than $70 in a matter of six weeks.

Now using similar tracking data, McMahon says China has reduced imports - indicating its reserves facilities may now be at maximum capacity - just as Saudi tanker sailings have increased over the last fortnight.

McMahon added that other members of the Saudi-led oil cartel Opec have also turned on the taps in contravention of agreed Opec restrictions.

This month oil prices have come back from their peak of $74 - more than double where they were in February. London Brent crude was up five cents at $69.24 today.

"Some of the drivers for the recent oil price rally appear to have played out for the time being, and may even start to reverse which should result in a retrenchment in the very near term," said McMahon in a note to clients.