Oil market slides on Iran news

Global oil prices fell on Monday following news that a landmark deal to curb parts of Iran's disputed nuclear programme in exchange for sanctions relief will take effect from January 20. New York’s main contract West Texas Intermediate for February delivery lost 61 cents to $92.11 a barrel. Brent North crude for February dipped 64 cents to stand at $106.60 in London. "Prices have softened slightly this morning as progress on a deal regarding Iran’s nuclear programme sets the stage for easing sanctions which could boost supply," said Sucden brokers analyst Kash Kamal. US President Barack Obama welcomed the announcement, but warned there was still a rough road ahead to clinch a comprehensive deal. Obama added that he would veto any attempt by Congress to impose new sanctions on Iran during the next phase of negotiations. "This is bearish for oil as we may see some oil sanctions lifted if the deal goes well," added Inenco analyst Lucy Sidebotham. The Islamic republic's oil exports have been crippled by a series of international sanctions aimed at bringing an end to its nuclear drive, which the West claims is being used to develop atomic weapons. Iran denies the assertion. Tehran agreed in November to roll back parts of its nuclear work and halt further advances in exchange for the release of billions of dollars in frozen assets and limited relief from sanctions that have choked its economy. The oil market also fell on Monday as traders continued to digest last Friday's weaker-than-expected non-farm payrolls data in top crude consumer the United States. The US government's Labor Department said Friday that the world's biggest economy added just 74,000 jobs in December. That dashed market hopes for a gain of 197,000. While the jobs data was weaker than expected, it could also prompt the Federal Reserve to delay any further reduction in its stimulus programme at its next meeting later this month. At its most recent meeting in December the bank's policy committee said it would cut its bond-buying scheme by $10 billion a month to $75 billion in January, citing a pick-up in the economy. Any delay to the tapering would put downward pressure on the US currency and make dollar-priced oil cheaper, boosting demand and prices. "Oil prices came under pressure in the wake of Friday’s disappointing US labour market datak," said Commerzbank analysts in a note to clients. "A weaker US dollar and the prospect of the US Federal Reserve possibly scaling back its bond purchases more slowly allowed prices to recover slightly overnight," they added.