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Progress in US-Iran negotiations eases supply concerns, lowering oil prices

Progress in US-Iran negotiations eases supply concerns, lowering oil prices

The oil prices dropped by about 1% after the nuclear talks between Iran and the United States progressed. This eased concerns that this dispute would reduce the supply of the Middle Eastern major producer.

Brent crude futures fell 70 cents or 1.03% to $67.26 per barrel at 0030 GMT, after closing 3.2% higher on Thursday. U.S. West Texas Intermediate Crude was trading at $64, down 68 cents or 1.05% after closing up 3.54% the previous session. Last week, Thursday was the final settlement day due to the Good Friday holiday.

Iran's Foreign Minister said that the U.S. had agreed to start drafting a framework for any potential nuclear deal with Iran on Saturday, following talks described by a U.S. government official as "very positive progress."

Progress in the nuclear talks follows the U.S. imposing further sanctions last week. These included sanctions against a teapot oil refinery based in China, which it claims processed Iranian crude. This increased pressure on Tehran during the discussions. Teapot is the industry term for smaller independent processors.

Brent and WTI both gained about 5% in the last week due to concerns about the tightening of Iranian oil supplies and hopes for an agreement between the United States, and the European Union. This was their first weekly increase in three weeks.

Separately, Russia, Ukraine and President Vladimir Putin blamed each for breaking the one-day ceasefire declared on Easter Sunday by the Russian president. Both sides accused the other of hundreds attacks, and the Kremlin said there was never an order to extend the ceasefire. (Reporting and editing by Christian Schmollinger; Florence Tan is the reporter)

(source: Reuters)