- WTI and Brent decline on news of an Iran nuclear deal.
- US crude oil stockpiles reached a new record high of 471.1 million barrels last week, according to the EIA.
Crude oil suffered a setback on Thursday amid news that Iran and six world powers reached a tentative agreement over Tehran’s nuclear program, a sign the United States may be preparing to lift sanctions that could exacerbate the global oil glut.
The price of West Texas Intermediate (WTI) for May delivery fell nearly 3 percent to $48.36 a barrel. The US benchmark has been unable to hold the $50 mark for very long, despite the rebound in crude prices earlier this year.
Global benchmark Brent crude declined more than 4 percent to $54.26 a barrel.
On Thursday the Associated Press said that Iran and the P5+1 – a group of six world powers that includes the United States, United Kingdom, Russia, China and France, plus Germany – had struck a tentative accord over Tehran’s uranium enrichment program. Both sides reportedly agreed on a framework to allow for a final round of negotiations in June.
The news suggested to some observers that the US may be moving closer to lifting sanctions on Iran, which would allow the Islamic Republic to boost its oil exports. This could exacerbate the global supply glut that has halved oil prices since June 2014.
Meanwhile, US crude stockpiles reached a new record high last week, the US Energy Information Administration (EIA) reported on Wednesday. Crude oil inventories increased by 4.8 million barrels to 471.4 million barrels in the week ended March 28, the highest level in 80 years. Total US crude oil production for the same week was nearly 9.4 million barrels per day, which represented an annual increase of 14.6 percent.