The US-Iran nuclear talks will resume today. Oil prices fell on Monday amid signs of progress in negotiations.
Sanctions on Iran’s oil sales, which store large amounts of oil in tankers, are on the agenda. If U.S. sanctions are lifted, Iran could quickly export millions of barrels of crude oil, helping to bring down fiery oil prices.
Last week, crude oil prices rose for the seventh week amid continued concerns about supply disruptions fueled by the US cold weather and ongoing political turmoil among major world producers.
Brent crude fell 58 cents, or 0.6%, to $92.69. The session high of $94 was the highest since October 2014.
West Texas Intermediate (WTI) crude fell 99 cents, or 1.3%, to $91.32 after touching $92.73.
Although the easing of sanctions had a limited impact on struggling Iran’s economy, markets saw the move as a sign that both sides were determined to reach an agreement.
Not only does the news about the negotiations feel good, but the US administration is also under pressure to lower inflation, and the quickest way to do so may be to lower energy prices.
Analysts say crude oil prices, which have risen by about 20% this year, are likely to exceed $100 a barrel due to strong global demand.
However, the Relative Strength Index (RSI), a measure of momentum, indicates that the oil market is currently overbought and ripe for a pullback.
Tensions remain high in Eastern Europe, fueled by supply concerns. The White House said on Sunday that Russia may invade Ukraine shortly, but it is very likely that it will still choose a diplomatic path.