Oil prices plunge 5.4pc as Iran agrees to nuclear deal
Crude oil futures extended losses after Iran and world powers said last night they had reached an outline accord that keeps them on track to end a decade-long nuclear dispute.
Brent slid as much as 5.4pc in London, while West Texas Intermediate crude dropped 4pc in New York.
The sides, who met in Lausanne in Switzerland for the talks, now have until the end of June to bridge gaps and draft a detailed technical agreement that would ease the international sanctions imposed on Iran, including oil exports.
Sanctions against oil exports will be lifted upon the deal's completion, Iran's Tasnim reported.
"This is mildly bearish," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said.
"We were expecting more Iranian oil to hit the market regardless of the outcome of the talks."
Iran, a member of OPEC, could boost shipments by 1m barrels a day if penalties are lifted, Oil Minister Bijan Namdar Zanganeh said.
Extra supplies could add to a worldwide glut that's sent oil prices 50pc lower since last year.
Brent for May settlement declined $2.90 to $54.20 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark crude traded at a premium of $5.87 to WTI on the ICE.
Iranian President Hassan Rouhani said that solutions to the nuclear issue had been found and the process of drafting an accord can begin. Germany's Foreign Ministry also said that a framework solution has been reached.
US President Barack Obama says the deal shuts down Iran's path to a bomb using enriched uranium. (Bloomberg)