Oil Prices Drop to Six-Year Low in Anticipation of Iran Deal

U.S. oil price fell to its lowest point in six years mid-day Monday.

Oil

The prospects of a possible U.S. deal with Iran over its nuclear program have added to traders’ expectations of a flow of new Iranian crude into the market.

The Wall Street Journal reported that the benchmark U.S. oil price fell to its lowest point in six years mid-day Monday, based on prospects of a glut in supply.

In earlier deals, US benchmark West Texas Intermediate (WTI) for April delivery sank as low as $43.57 —the lowest since March 12, 2009. The contract later recovered just a bit, to stand at $44.40, down 44 cents from Friday’s closing level.

Crude prices lost about 60% of their value to $40 per barrel between June and late January due to abundant supply, a weak global economy and a rising dollar.

According to the WSJ, OPEC said that its February crude-oil output was down to 30.02 million barrels a day, blaming disruptions caused by the ongoing instability in Libya.

Meanwhile, a senior U.S. official told AFP it was still unclear if a deal between Iran and six world powers could be reached in outline form by the March 31 deadline, comparing the process to a “roller coaster.”

After a five-hour meeting between Secretary of State John Kerry and his Iranian counterpart, the official said, “Iran still needs to make some very tough and necessary choices.”

The official added: “We still hope to be able to get there but quite frankly we still don’t know if we will be able to.”

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