Oil settles below US$90 as China outlook sours, Iran talks advance

Oil fell as softer economic data from China and a potential breakthrough in negotiations with Iran eased pressure on crude markets.

West Texas Intermediate closed nearly 3 per cent lower after sinking earlier to a six month low. Oil started the week on a bearish note after China announced a surprise cut in key interest rates in response to weak economic data. Meanwhile, Iran signaled a nuclear deal agreement could be reached in the next few days, raising the prospect of Iranian crude returning to the global market. 

“Most are increasing the probability of an Iranian deal,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management. “I see US$80 as significant support and would expect buyers start to get interested at those prices,” she added. 

Foreign Minister Hossein Amirabdollahian said in a briefing that the country would inform the European Union Monday evening of its position regarding a final draft text for a finalized nuclear deal, striking a more conciliatory tone than in recent months. A spokesperson for the Iranian foreign ministry said there could be a basis for a signed agreement “in the very near future.”