Oil headed for a third quarterly loss as Iranian and Western diplomats worked toward a nuclear deal that may lead to the OPEC member increasing crude exports and worsening a global supply glut.
Futures dropped as much as 1.7% in New York, falling for a third day.
Russian Foreign Minister Sergei Lavrov left the talks in Switzerland and will only return if an agreement is in sight, signaling negotiations may continue into the final hours leading to Tuesday’s deadline.
US crude stockpiles probably expanded further from a record last week, a survey showed before government data Wednesday.
Oil is sliding toward the longest run of quarterly declines since 2003 amid speculation the global surplus that cut prices by almost 50% last year will persist.
Iran may be hoarding 7 million to as much as 35 million barrels, shipbrokers and government officials estimated, which Barclays Plc and Societe Generale SA predict would be the first to be sold abroad should a nuclear pact be reached.
“If there’s an agreement, that could release a fair bit of oil into the market,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “The price has been reasonably resilient given all the downside potential.”
West Texas Intermediate for May delivery fell as much as 82 cents to $47.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $47.90 at 1:53 p.m. Singapore time.
The contract lost 19 cents to $48.68 on Monday.
The volume of all futures traded was about 44% below the 100-day average. Prices have decreased 3.7 percent in March and are down 9.9 percent in the past three months.
Brent for May settlement slid as much as 63 cents, or 1.1%, to $55.66 a barrel on the London-based ICE Futures Europe exchange.
It lost 12 cents to $56.29 a barrel on Monday. Prices are down 11% for the month and 2.7 percent lower this quarter. The European benchmark crude traded at a premium of $7.83 to WTI.
US Secretary of State John Kerry said “tricky issues” remain to be resolved if diplomats are to meet their timetable and reach an outline agreement on Iran’s nuclear program.
Negotiators remain divided over the pace of easing sanctions and the limits imposed on research on the Persian Gulf nation to ensure it can’t obtain nuclear weapons.
Iran is the fifth-largest producer in the Organization of Petroleum Exporting Countries, a 12-member group that pumps about 40% of the world’s oil.
The government could raise crude exports by 1 million barrels a day if sanctions were lifted, Oil Minister Bijan Namdar Zanganeh said March 16.
In the US, crude inventories probably rose by 4.5 million barrels through March 27, according to the median forecast in the Bloomberg survey of six analysts before Wednesday’s Energy Information Administration report.
Stockpiles have climbed the prior 11 weeks to 466.7 million, the highest level in weekly records from the Energy Department’s statistical arm dating back to August 1982.
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