Oil slumps as Iran supply news rises
Oil prices tumbled slightly on Tuesday, with the latest progress in the latest talks to revive the 2015 Iran nuclear deal, which will pave the way for boosting crude oil exports in a tight market.
Brent crude futures fell 14 cents, or 0.1%, to $96.51 a barrel at 0404 GMT, paring a 1.8% gain from the previous session.
West Texas Intermediate (WTI) crude futures fell 16 cents, or 0.2%, to $90.60 after climbing 2% in the previous session.
The European Union released a "final" text late Monday pending approval from Washington and Tehran to revive the 2015 Iran nuclear deal. A senior EU official said the final decision on the proposal is expected in a few weeks.
While details about the timing of the resumption of Iran's oil exports remain unclear even if the deal is revived, there is certainly scope for Iran to increase its oil exports relatively quickly.
It is said that Iran could increase its oil exports by 1 million-1.5 million barrels per day, or 1.5 percent of the global supply, within six months.
A revival of the 2015 nuclear deal will likely cause oil prices to fall sharply, given that markets do not believe a deal will likely be reached.
However, the market ground remains firm for now, with stronger-than-expected trade data from China over the weekend and signs that demand may not fall as much as feared, following the startling acceleration in US job growth in July.
The oil market has recently come under pressure from fears of a global recession, with Brent prices experiencing their biggest weekly drop last week.
China, the world's largest importer of crude oil, imported 8.79 million barrels per day of crude oil in July, according to customs data.
Additionally, traders will watch weekly US oil inventory data from the American Petroleum Institute (API) on Tuesday, followed by the Energy Information Administration (EIA) on Wednesday.
According to surveys, distillate stocks, which include diesel and jet fuel, remained unchanged, with US crude stocks expected to drop by about 400,000 barrels and gasoline stocks to decline by about 400,000 barrels per week through August 5.
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