Oil prices down as Iran nuclear deal inches closer

Crude oil prices fell on Monday as world powers met with Iran to discuss its nuclear programme and an end to economic sanctions in Lausanne, Switzerland.

Iran and so-called P5+1, consisting of the US, France, Russia, China, the UK and Germany, have until Tuesday evening to reach a compromise.

Brent crude fell 1.65% at $55.48 a barrel at 1150 GMT while WTI Crude was down 2.29% at $47.75 a barrel, as the prospect of a deal fuelled concerns that global supplies could increase if economic sanctions on oil-producing Iran are lifted. A deal would prompt a fall in oil prices by as much as $5 a barrel, according to analysts.

The Iran negotiations have taken almost 18 months to date and analysts believe that a deal could be close. Officials from both sides have said that a deal is possible and that a few issues remained to be resolved.

Oil prices have not recovered since they fell dramatically in the second half of 2014. The halving of crude oil prices was fuelled by global oversupply, following a boom in US shale oil production, and falling demand.

The world's top producer group, the Organisation for the Petroleum Exporting Countries (Opec) has maintained output in a bid to retain market share, rather than cutting supplies to push up prices.

The strong US dollar is also a hindrance to any recovery in the oil price, analysts at Barclays said.