Oil prices drop

MANILA, Philippines - Oil prices fell yesterday as traders focused on whether Iran and six world powers would reach a deal that could add fuel to an already oversupplied market if sanctions against Tehran are lifted.

The two sides are trying to reach an agreement in nuclear negotiations by a Tuesday deadline.

“Any relaxation of Iran oil sanctions could see increased exports adding to swelling global supplies and further pressuring prices,” ANZ said.

Brent crude futures were down 42 cents at $55.99 by 0633 GMT as the market began to price in a potential deal with Iran. US West Texas Intermediate (WTI) was down 84 cents at $48.03 a barrel.

Barclays said that the U.S. build-up in stocks would make its way into an already oversupplied market in the second quarter and that global demand would unlikely be strong enough to support oil prices once that happens.