Oil prices slid for the second straight session amid concerns that US crude stockpiles were continuing their growth and the deadline for reaching a nuclear deal with Iran neared.
Light, sweet crude for May delivery dipped 0.74 cents or 1.5% to $48.13 a barrel on the New York Mercantile Exchange in morning trading.
The Nymex crude had slipped to a low of $47.65 a barrel but eased losses when it was reported that the Russian foreign secretary Sergey Lavrov had left the negotiations in Lausanne, Switzerland.
The volume of all futures traded were more than 16% down on the 100-day average of volumes traded for that time of the day.
Brent, the global benchmark, for May delivery slipped 86 cents or 1.55% to $55.55 a barrel on the London-based ICE futures exchange. The benchmark’s premium on West Texas Intermediate slipped to just above $7.55.
Iran and six other world players intensified on their efforts to reach a resolve on the country’s nuclear program before the deadline in 48 hours.
According to Bloomberg, economic sanctions on the country have seen its oil exports constrained to just over one million barrels a day with government officials and shipbrokers warning that the gulf country could be hoarding between 7 million and 35 million barrels of oil.
If the sanctions are lifted, the country’s oil exports could increase by as much as 1 million barrels a day which could worsen the global oil glut after OPEC-countries refused to yield to cuts.
“We’re likely to stay jittery through the day on any headline coming out of Lausanne, and the stronger dollar isn’t helping oil either,” analyst Phil Flynn of Price Futures Group in Chicago told Reuters.
Oilfield services provider Genscape Inc also told its clients that stockpiles in Cushing, Okla., an important storage and delivery point for the Nymex contract, rose by 2 million barrels in the week ending Friday.
The inventories are now at a record high with traders worried that the storage hub could get to maximum capacity soon.
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