Global oil prices fell on Monday as Iran and the P5+1 nations to a step closer to reaching a deal to end sanctions against the Islamic Republic.
Iran’s oil exports are currently limited to 1mn bpd as a result of international sanctions, which are crippling the country’s economy.
Iran is expected to dramatically increase its production levels once sanctions are lifted, bringing more barrels to an already oversupplied market.
“The oil market has faced persistently weak supply/demand balances for months. Now macro risks from Greece, Iran, and China are adding to the poor micro,” Bank of America Merrill Lynch said, adding that U.S. crude prices “could soon drop well below our $50 per barrel target in 3Q15”.
Front-month U.S. crude futures were trading at $52.13 per barrel at 0025 GMT, down 61 cents from their last settlement. Front-month Brent crude was down 69 cents at $58.04 a barrel.
