Tokyo - Oil prices fell on profit-taking in Asia on Tuesday after rallying in the previous session owing to doubts the nuclear agreement between Iran and global powers will immediately boost Tehran's crude exports, analysts said.
The US benchmark, West Texas Intermediate (WTI), fell 35 cents to $51.79 while Brent dipped 51 cents to $57.61 in late-morning trade.
WTI jumped $3 while Brent bolted $3.17 on Monday.
“The current decline in oil prices is most likely due to profit-taking as investors sold at rising prices to secure gains,” Ken Hasegawa, energy trading manager at Newedge Group in Tokyo, 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 between Tehran and 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 world's 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