Florence Tan

SINGAPORE (Reuters). – U.S. crude oil prices dropped further Thursday after Iran and the world powers agreed to resume talks on nuclear issues this month. These negotiations could see U.S. sanctions lifted on Iran’s oil production, increasing global supply, and a reduction in their overall price.

U.S. West Texas Intermediate crude oil fell to $79.94/barrel by 0106 GMT for the third consecutive day. That’s a drop of 92 cents or 1.1%. Futures fell to $81.19 per barrel for the second session of January, down 80cs or 1%.

After a greater than anticipated rise in crude stock stocks, both benchmarks posted Wednesday’s largest daily percentage drops since August. Brent closed at its lowest level since October 7th and WTI closing at its lowest level since October 13th. [EIA/S]

Vivek Dhar, a Commonwealth Bank commodities analyst, stated that the overnight drop in oil prices was probably due to an increase in U.S. crude oil stocks in a note.

The Iranian announcement by the U.S. that it will resume negotiations on the renewal of a nuclear agreement was the main driver for the drop in oil prices.

On Nov. 29, six nations and Tehran will hold talks to revive 2015 Iran’s nuclear deal. Iran demands that the United States lift all sanctions that limit its oil exports.

On Thursday, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies will be meeting. It is expected that the group will reaffirm its plans to maintain monthly supply increases constant despite requests for acceleration.