Oil has fallen from a 7-year high ahead of further talks between the US and Iran.

By Emily Chow

BEIJING (Reuters) – Oil prices plummeted ahead of US-Iran talks on Tuesday, reviving a nuclear deal that could lead to the lifting of sanctions on Iran’s oil sales, boosting global supply.

It fell 40 cents last, or 0.15%, to $ 92.55 a barrel for 0347 GMT after hitting a seven-year high of $ 94 on Monday. US West Texas Intermediate grossed a penny down $ 91.31 a barrel.

Both oil contracts have hit a seven-year high, supported by strong global demand, continuing tensions in Eastern Europe and supply disruptions due to cold weather in the US.

Negotiations for the resumption of Iran’s 2015 nuclear deal in Vienna will resume on Tuesday after a 10-day hiatus. The U.S. has reinstated some sanctions exceptions, while Iran is calling for a complete abolition of sanctions and a US guarantee that no further sanctions can be taken.

“It was clear that Iran’s oil spectrum weighed heavily on sentiment,” ANZ Research analysts said in a statement on Tuesday, noting that negotiators referred to “progress” in reaching “an agreement that would ultimately recover the nation’s sanctioned oil.” global markets.

“However, they continue to generate more upward signals in favor of oil,” they added, noting Saudi Arabia’s rising oil price and the unexpected closure of a U.S. refinery.

The easing of oil prices, however, may be temporary. Although optimism about the US-Iran talks prompted gains, the weakness in prices will be short-term, as the oil market remains in a supply deficit, said OANDA analyst Edward Moya.

“Gross demand is expected to continue to improve steadily throughout the year, as the oil market is being fully boosted in terms of supply and geopolitical risks,” he said.

Saudi Aramco (SE 🙂 said on Saturday it had raised the prices of all gross grades it sells to Asia from February onwards in March, in line with market expectations, reflecting strong Asian demand and stronger oil and jet fuel margins.

In the United States, Texas refineries stopped producing power outages across the city on Friday as freezing temperatures on a cold Arctic front hit the Gulf Coast, although some refineries are recovering or have since returned to near normal operation.

U.S. crude oil and gas depots also rose last week, while distillate inventories fell, according to a preliminary Reuters poll on Monday. Gross inventories grew by about 700,000 barrels in the week to February 4th. [EIA/S]