The price of Brent crude oil futures dropped below $55 a barrel today, as negotiations over a nuclear deal between Iran and six world powers was extended beyond the Tuesday deadline.

Reuters reported that Brent crude dropped 31 cents to $54.80 a barrel, and US crude was trading 53 cents lower at $47.07 a barrel.

Efforts to reach a framework agreement were due to continue today in Lausanne, Switzerland.

"Here is the likelihood of Iranian oil being allowed to hit an already oversupplied oil market and drive prices lower."

UK Foreign Secretary Philip Hammond said progress had been made between the parties over Iran’s nuclear programme, but that key concerns should still be resolved.

The US warned that it was ready to abandon the talks and that Iran insisted on its nuclear rights.

CMC Markets chief markets analyst Michael Hewson was quoted by the news agency as saying: "There is the likelihood of Iranian oil being allowed to hit an already oversupplied oil market and drive prices lower."

A survey by Reuters has found that Iran currently produces around 2.8 million barrels per day (bpd).

Shipping sources say Iran is storing approximately 30 million barrels of oil on its fleet of supertankers, as Western sanctions have limited the country’s crude oil exports to around one million bpd.

Meanwhile, data from the American Petroleum Institute revealed that US crude inventories had increased by 5.2 million barrels in the week to 27 March.