Oil prices fall after signs of progress in US-Iran nuclear talks

Oil falls after signs of progress in U.S.-Iran nuclear talksOil prices fell on Monday on expectations the U.S.-Iran talks may be nearing a conclusion on reviving a deal restricting the OPEC country's nuclear weapons development, which would raise crude supply, though global supply concerns capped losses.

U.S. President Joe Biden's administration on Friday restored sanctions waivers to Iran to allow international nuclear cooperation projects, as the talks on the 2015 international nuclear deal enter the final stretch.

If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.

Brent crude was down 53 cents, or 0.6%, to $92.74 a barrel by 0055 GMT, after rising $2.16 on Friday.

U.S. West Texas Intermediate crude dropped 74 cents, or 0.8%, to $91.57 a barrel, having gained $2.04 the previous session.

Both benchmarks reached seven-year highs on Friday, extending their rally into a seventh week on ongoing worries about supply disruptions fuelled by political turmoil among major world producers.

"Investors took profits on the U.S.-Iran news, though they expect more twists and turns in the talks and no agreement to be reached anytime soon," said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

"The market tone remained bullish, with investment bankers predicting Brent hitting $100 a barrel and global supply continuing to be tight with OPEC+ not reaching their output targets and the United States not raising output much," he said.

Crude prices, which have already rallied about 20% this year, are likely to surpass $100 per barrel because of strong global demand, analysts have said.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, are struggling to meet targets despite pressure from top consumers to raise production more quickly.

Also in the United States, even though the rig count has climbed for a record 18 months in a row, oil production is still far from pre-pandemic record levels.

Adding to pressure, tensions remain high in Eastern Europe, with White House national security adviser Jake Sullivan saying on Sunday that Russia could invade Ukraine within days or weeks but could still opt for a diplomatic path.