Oil prices drop on prospects of US-Iran deal

Oil prices dropped over 2% on Thursday amid investor concerns over a potential supply glut fueled by prospects of a US-Iran deal and an unexpected increase in American crude inventories last week, according to Reuters.

An Iranian official told NBC News the country is willing to resume dialogue with the US if restrictions are lifted. Yuki Takashima of Nomura Securities warns the potential deal could loosen the global oil supply-demand balance. Saudi Arabia expressed support for US-Iran talks, hoping for a positive outcome.

Meanwhile, US crude inventories unexpectedly jumped 3.5 million barrels in the week ending May 9, according to Energy Information Administration data, sharply contradicting a 1.1 million barrel draw forecast by analysts in a Reuters survey. Prior to that, the American Petroleum Institute reported an even larger 4.3 million barrel increase.