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Oil prices slip after Iran-fuelled rally

London: Oil prices fell Tuesday, with profit-taking in evidence a day after the market rallied on doubts over an agreement with Iran over the crude producers nuclear programme, traders said.

US benchmark West Texas Intermediate (WTI) for delivery in May dropped 64 cents to $51.50 a barrel compared with Mondays close.

Brent North Sea crude for May lost 46 cents to $57.66 in midday trade.

The contracts had surged by three dollars each on Monday.

“The current decline in oil prices is most likely due to profit-taking,” Ken Hasegawa, energy trading manager at Newedge Group, told AFP.

Analysts attributed the steep gains on Monday to investors concluding that the nuclear framework agreed between Iran and international powers will have a minimal near-term effect on global crude supplies.

The deal Tehran agreed with the United States, Britain, China, France and Russia plus Germany paves the way for the Islamic republic to curtail its nuclear activity in exchange for relief from punishing economic sanctions, including on oil investment.

“Most traders were waiting on Iran nuclear talks to cause a flood in Iranian oil as sanctions get lifted,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.

“However, the tone from the US seems firm and this means that sanctions would only be lifted slowly,” he added.

Iran has the worlds fourth-largest oil reserves but its exports have fallen from more than 2.2 million barrels per day in 2011 to about 1.3 million because of the US-EU sanctions, which were put in place to prevent it building a nuclear bomb. (AFP)