By Barani Krishnan
Investing.com - Oil prices fell as much as 2% on Wednesday on talk of a nuclear deal by May for Iran that would take U.S. sanctions off the Islamic Republic’s crude exports, potentially adding another 2 million barrels per day or more to the market.
Crude futures were already down earlier in the day after a somewhat bearish weekly dataset on petroleum supply-demand released by the U.S. Energy Information Administration.
News from wire agencies that indirect talks between Iranian and U.S. negotiators, held in Vienna through European intermediaries, were bearing fruit further depressed the market.
“The Biden administration has signaled it is open to easing sanctions against critical elements of Iran’s economy, including oil and finance, helping narrow differences in nuclear talks,” Reuters reported, quoting sources involved in the talks. “Progress has come as the US laid out more clearly the contours of the sanctions relief it is prepared to provide”
The report added that the U.S. was open to lifting terror sanctions against Iran’s central bank, its national oil and tanker companies and several key economic sectors including steel, aluminum and others.
It also quoted Russia’s ambassador to the United States as saying that the negotiations could be completed by late May, when an agreement ensuring continued International Atomic Energy Agency oversight of Iran’s nuclear activities expires.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, was down $1.30, or 2%, to $61.37 per barrel by 1:38 PM ET (17:38 GMT). It fell to a session low of $60.87 earlier.
London-traded Brent, the global benchmark for crude, was down $1.16, or 1.7%, to $65.41. Brent fell to as low as $64.96 earlier.
* This is a breaking news story. Please check back for updates.