Iran nuclear accord sends crude, Brent prices tumbling

Investing.com - U.S. and Brent oil futures plunged on Monday, after a deal to limit Iran’s nuclear activities was reached over the weekend.

On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD93.35 a barrel during U.S. morning trade, down 1.55%.

New York-traded oil futures fell by as much as 1.65% earlier in the day to hit a session low of USD93.26 a barrel. The January contract settled 0.63% lower on Friday to end at USD94.84 a barrel.

Nymex oil futures were likely to find support at USD92.51 a barrel, the low from November 14 and resistance at USD95.56 a barrel, the high from November 22.

Meanwhile, on the ICE Futures Exchange in London, Brent oil futures for January delivery plunged 1.95% to trade at USD108.91 a barrel. London-traded Brent prices fell by as much as 2.7% earlier to touch a daily low of USD108.06 a barrel earlier.

The spread between the Brent and U.S. crude contracts stood at USD15.56 a barrel.

Weekend talks among the U.S., Russia, China, Britain, Germany, France and Iran ended in agreement on a \"first step deal” that is meant to limit advancements in Iran\'s nuclear program in exchange for easing economic sanctions against Tehran.

The interim deal, which is reversible, will last for six months to allow for negotiations aimed at reaching a permanent agreement.

Under the terms of the agreement, Iran will stop enriching uranium beyond 5%, and neutralize its stockpile of uranium enriched beyond this point. Iran will also give greater access to nuclear inspectors in exchange for no new sanctions for six months.

Iran will also receive sanctions relief worth approximately USD7 billion in trade on oil, auto and airplane parts, gold and precious metals for six months.

Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than 1 million barrels of oil per day from the global market over the past two years.

World powers have accused Iran of using its nuclear program to secretly develop nuclear weapons, an assertion it has consistently denied.

U.S. President Barack Obama welcomed the deal, saying key parts of Iran’s nuclear program would be rolled back.

However, Israeli Prime Minister Benjamin Netanyahu called the deal a \"historic mistake\" on Sunday and added that his country would not be bound by the agreement.