West TX Oil Drops to Near $47 on Iran Deal

Oil prices dipped in Asian morning trading on Monday, adding to steep losses in the previous session, as Iran and six world powers tried to reach a deal that could add oil to the market if sanctions against Tehran are lifted.  Iran and six world powers tried to break an impasse in nuclear negotiations on Sunday ahead of a deadline to find a preliminary deal by Tuesday, although diplomats warned the attempt could still fall apart.

International benchmark Brent crude oil futures LCOc1 were at $56.41 a barrel at 0131 GMT, flat with its last settlement after falling five percent on Friday as the market began to price in the possibility of a deal with Iran. Front-month U.S. West Texas Intermediate (WTI) crude futures CLc1 lost 25 cents at $48.62 a barrel.  “Any relaxation of Iran oil sanctions could see increased exports adding to swelling global supplies and further pressuring prices,” ANZ bank said on Monday.

In the United states, the oil rig count continued to fall as producers adjust to lower prices, although analysts said that lower drilling activity would only affect actual oil production later this year.  “The current rig count is pointing to U.S. production declining slightly sequentially in 2Q15 and 3Q15,” Goldman Sachs said in a note.


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