Oil dropped from a three-month high as Iran said it would raise output to pre-sanctions levels before joining talks to freeze production.

Futures fell 3.4 percent in New York. Iran plans to raise output by about a third to 4 million barrels a day before it will consider joining any move to rebalance the market, the Iranian Students News Agency reported, citing Oil Minister Bijan Namdar Zanganeh. The Islamic republic boosted production by 187,800 barrels a day in February, the biggest monthly gain since 1997, the Organization of Petroleum Exporting Countries said in a monthly report.

Oil has rebounded after slumping to a 12-year low in February on speculation stronger demand and falling U.S. output will ease a surplus. The International Energy Agency said March 11 that prices may have reached their lowest point as shrinking supplies outside the OPEC and disruptions inside the group reduce the glut. U.S. crude supplies, meanwhile, grew to the highest level since 1930.

West Texas Intermediate for April delivery fell $1.32 to settle at $37.18 a barrel on the New York Mercantile Exchange. The contract climbed 1.7 percent to $38.50 on Friday, the highest close since Dec. 4.

Brent for May settlement slipped 86 cents, or 2.1 percent, to $39.53 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade closed at a 69-cent premium to WTI for May delivery.

Source : Bloomberg