Emily Chow

BEIJING (Reuters – Oil prices eased Tuesday morning in anticipation of the resumption if indirect talks between Iran & the United States. These may lead to a nuclear agreement that would remove sanctions from Iranian oil sales and increase global supplies.

After hitting an all-time high of $94 last Monday, the price was down by 36 cents or 0.4% at $92.33/barrel on 0147 GMT. U.S. West Texas Intermediate crude fell 26c, or 0.3%, at $91.06/barrel

Oil contracts reached their recent 7-year highs. This was due to strong global demand and ongoing tensions between Eastern Europe, as well as potential disruptions from cold U.S. weather conditions.

After a 10 day pause, the talks to revive 2015 Iran’s nuclear agreement will resume in Vienna on Tuesday. While the United States granted some waivers of sanctions, Iran demanded that sanctions be completely lifted and that it guarantees no additional punitive actions.

“Sentiment was strained by Iranian oil coming to the markets, the spectre of Iranian crude oil hitting the market weighed down sentiment,” ANZ Research analysts wrote on Tuesday. Noting that the negotiators had cited progress in reaching a deal that would “ultimately reinstate the nation’s sanctioned oils” to the global markets, they said that “the mood has eased lower.”

They said that they continue to see more positive signals for oil, including Saudi Arabia increasing its oil prices, and an unexpected shut down of an American refinery.

Saudi Aramco (SE:) announced Saturday that it raised the prices of all its crude grades sold to Asia in March, from February. This was in accordance with market expectations and reflected firm Asian demand and higher margins for jet fuel and gasoil.

According to preliminary Reuters poll, U.S. crude oil and gasoline inventories likely rose in the last week. However, distillate inventories are falling. In the week ending February 4, crude oil inventories increased by 700,000.