Oil dips as U.S. keeps alive hopes of Iran nuclear deal

Mon Jul 13, 2015 4:21pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil fell more than 1 percent on Monday after the United States kept alive hopes of reaching a nuclear deal with Tehran that could bring hundreds of millions of additional barrels of crude into an oversupplied market.

A nearly 4 percent drop in gasoline prices also weighed on crude, as the fuel continued to lend direction to the broader oil market due to the ongoing peak U.S. summer driving season.

Greece's $86 billion euro bailout by its international creditors had little positive impact on oil, even though the Greek debt crisis had been one of the most serious factors depressing the market in the past two weeks.

Brent futures, the global benchmark for crude, settled down 88 cents, or 1.5 percent, at $57.85 a barrel.

U.S. crude futures finished 54 cents, or 1 percent, lower at $52.20.

Crude fell nearly $2 a barrel earlier on Monday on speculation Iran and world powers were ready to announce a nuclear deal that could lift Western sanctions on Iranian oil exports.

Iranian Foreign Minister Mohammad Javad Zarif, however, said later that the two sides would not be able to finish their talks by Monday, briefly pushing crude prices higher. The market fell back after the White House said negotiations would continue until a final agreement was reached on Iran's nuclear program.

"There's every indication that both sides want a deal, and that's causing oil to sell off," said David Thompson, executive vice-president at Powerhouse, a commodities broker in Washington that specializes in energy. "But we must remember too that the U.S. Congress has to review whatever's agreed, so the deal could still unravel later."   Continued...

An offshore oil platform is seen in Huntington Beach, California September 28, 2014.  REUTERS/Lucy Nicholson