The price of oil fell to near $92 a barrel Monday as the possibility of increased crude exports from Iran raised the prospects of an excess of supply on global markets.
By early afternoon in Europe,
benchmark U.S. oil for February delivery was down 58 cents to $92.14 a barrel
in electronic trading on the New York Mercantile Exchange. On Friday, the
contract surged $1.06 to settle at $92.72 a barrel.
Iran's oil industry, which has seen
its exports severely limited by the sanctions, will benefit from the deal set
to take effect Jan. 20, experts said.
"Up to 1 million barrels of
Iranian oil per day could become available," said analysts at Commerzbank
in Frankfurt in a note to clients. "Unless oil production was cut
elsewhere, this would give rise to a considerable oversupply on the oil market,
which would weigh on prices."
The Nymex contract fell nearly 5
percent last week despite a late rally on Friday, when disappointing U.S. jobs data
fueled speculation that the Federal Reserve will halt or slow plans to reduce
its economic stimulus program.
The stimulus, which has kept interest
rates low, has helped underpin oil prices by weakening the dollar and also by
attracting investors to commodities in search of higher profits. A weaker dollar usually boosts oil prices by
making crude cheaper for traders using other currencies.
Brent crude, used to set prices for
international varieties of crude, was down 27 cents at $106.98 a barrel on the
ICE Futures exchange in London.
In other energy futures trading on
- Wholesale gasoline shed 0.4 cent to
$2.6651 a gallon.
- Natural gas jumped 11.9 cents to
$4.172 per 1,000 cubic feet.
- Heating oil was down 0.17 cent to $2.939 a gallon.