Oil prices have fallen sharply on the possibility of Iran adding to the global oil surplus and continued worries over Greece.
A comprehensive agreement on the future of Iran’s nuclear programme is likely to be unveiled on Monday. Iran is expected to accept curbs on its nuclear plans in return for significant easing of sanctions that would allow it to increase oil exports.
Brent crude fell almost 3%, or $1.70 to $57.06 a barrel. The oil price plunged from $116 a barrel in June 2014 to less than $50 in January as investors reacted to concerns over world economic growth and an abundance of oil as a result of increased US production. News that European leaders had reached an agreement on Greece pushed up the price off its lowest levels to about $57.30 a barrel.
Mike van Dulken at Accendo Markets said more drilling platforms in the US were also putting downward pressure on the oil price.
“An increase of 17 [rigs] in the last two weeks has big implications for production while Iran nuclear talks trudge on in the background, an imminent deal adding fuel to the fire of oversupply concerns.”
The news on Iran added to concerns about demand for oil caused by economic events. Chief among these was the Greek crisis and its potential knock-on effects to the eurozone before gruelling overnight talks resulted in a deal on Monday morning.
Investors are also concerned about China, the world’s second-biggest economy. The country’s stock market has been through weeks of turbulence and a 7.5% increase in crude oil imports published on Monday was said to be caused by stockpiling rather than increased demand.
