Oil extends losses as prospect of Iran deal stokes fears of extra supply

Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. (Reuters)

SULAIMANI (ESTA) — Oil prices extended losses on Friday as the prospect of extra supply from Iran returning to the market eclipsed fears of a possible supply disruption arising from a Russian invasion of Ukraine.

Brent crude futures fell $2.45 to $90.69 a barrel at 1035 GMT, extending a 1.9% drop from the previous session.

U.S. West Texas Intermediate (WTI) crude futures shed $2.36 to $89.40 a barrel, after sliding 2% in the previous session.

Both benchmark contracts hit their highest levels since September 2014 on Monday, but were headed for their first weekly fall in nine weeks amid reports of a deal taking shape to revive Iran’s 2015 nuclear agreement with world powers.

Diplomats said the draft accord outlines a sequence of steps that would eventually lead to granting waivers on oil sanctions, according to Reuters.

That would bring about 1 million barrels a day of oil back to the market, but the timing is unclear.

“The downward pressure on crude from the prospect of a deal is likely to sustain … unless the parties end the latest round of talks still in a deadlock,” Reuters quoted Vandana Hari, founder of oil market analysis provider Vanda Insights, as saying.

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