Crude dropped as Iran made progress on an accord to lift sanctions on its exports, threatening to add to the surplus in global markets.

Iran’s cooperation with inspectors is aiding the investigation of the nation’s past nuclear activities, the International Atomic Energy Agency told world powers in Vienna on Monday. Successful implementation of a July 14 deal would allow Iran to resume oil sales halted by sanctions. Declines eased in the last hour of trading as a government report tomorrow is forecast to show U.S. crude stockpiles slipped.

Iran’s vow to increase output “at any cost” to reclaim market share will potentially add to a global surplus that Goldman Sachs Group Inc. predicts may keep prices low for the next 15 years. Oil’s slump is taking its toll on shale drilling in the U.S., where production has fallen from the highest level in more than three decades.

West Texas Intermediate for October delivery, which expired Tuesday, fell 85 cents, or 1.8 percent, to settle at $45.83 a barrel on the New York Mercantile Exchange. Futures surged 4.5 percent Monday. The volume of all futures traded was 23 percent below the 100-day average. The more-active November contract slipped 60 cents to $46.36.

Brent for November settlement rose 16 cents to end the session at $49.08 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $2.72 premium to WTI for the same month.

Source : Bloomberg