The price of oil dipped below $95 a barrel Tuesday ahead of the resumption of talks to curb Iran's nuclear program and amid expectations of growing U.S. supplies.
By early afternoon in Europe, benchmark U.S. crude for December delivery was down 43 cents to $94.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 54 cents to $95.14 on Monday.
Six key powers are expected to resume talks with Iran next week in Geneva after initial negotiations failed to reach a deal. But there was some diplomatic progress as Iran promised to allow expanded U.N. monitoring of its nuclear sites.
The U.S.-led negotiations aim to impose curbs on Iran's nuclear program, including a cap on enrichment. In return, the key powers will consider a gradual rollback of sanctions that have crippled Iran's economy. This could bring an influx of Iranian oil into markets at a time of already abundant supplies.
Oil prices were also dragged down as U.S. crude stocks are expected to rise further, which could point to slowing demand. Data for the week ending Nov. 8 is expected to show a build of 1.8 million in crude oil stocks and a draw of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
Markets were also digesting reports from the International Energy Agency and the Organization of Petroleum Exporting Countries. The Paris-based IEA said China and India would turn Asia into the world's main driver of energy demand in coming years, while the United States is expected to be able to meet its energy needs from domestic sources by 2035.
OPEC, headquartered in Vienna and representing some of the world's largest oil exporters, including Saudi Arabia, Venezuela and Nigeria, kept forecasts for demand for its crude this year and next unchanged from a month ago but warned there were still risks to growth.
"Although the global economy continues to improve, the pace of growth remains sluggish and near-term developments will need close monitoring," OPEC said in its monthly report. Brent crude, the international benchmark, was up 28 cents to $106.69 a barrel on the ICE exchange in London.
In other energy futures trading on Nymex: — Wholesale gasoline added 0.12 cent to $2.5977 a gallon. — Heating oil rose 0.15 cent to $2.8928 a gallon. — Natural gas advanced 4.3 cents to $3.617 per 1,000 cubic feet.