The price of Brent crude oil fell below $56 a barrel today, on weak demand and a potential deal over Iran’s nuclear programme.
Reuters reported that Brent crude futures were down 42 cents at $55.99, and US West Texas Intermediate dropped 84 cents to $48.03 a barrel.
Iran and six world powers are planning to reach a deal by Tuesday. The move is expected to add oil to the market if sanctions on Tehran are lifted.
ANZ was quoted by the news agency as saying: "Any relaxation of Iran oil sanctions could see increased exports adding to swelling global supplies and further pressuring prices."
Wood Mackenzie said: "Saudi Arabia had to cut its price in Asia to ensure its crude oil remained attractive.
"Other suppliers looking to position themselves in Asia will have to pay close attention to the Saudi’s pricing strategy."
Meanwhile, the oil rig count continued to drop in the US. Analysts, however, said that lower drilling activity could only affect oil production later in 2015.
Goldman Sachs said: "The current rig count is pointing to U.S. production declining slightly, sequentially in 2Q15 and 3Q15."
Despite the anticipated drop, Goldman said that drilling could bounce back in 2016.