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Iranian nuclear talks drag on oil prices

Low oil prices could be a governor to future U.S. production growth.

By Daniel J. Graeber

NEW YORK, March 30 (UPI) -- Prospects of Iran re-entering the world oil stage through nuclear negotiations helped push crude oil prices modestly lower in early Monday trading.

Iranian media reports said "robust positive signs" have emerged from the negotiating table in Switzerland, where diplomatic talks are approaching a self-imposed Tuesday deadline.

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The news erased concerns over pan-Arab military action in Yemen. The price for Brent crude oil fell more than 1.2 percent to $56.41 per barrel in early Monday trading on signs of progress in Switzerland.

Iran is believed to maintain a military dimension to a nuclear program its adversaries suspect is geared toward a weapon. Under the terms of a November 2013 arrangement, Iranian crude oil exports are limited and a nuclear breakthrough could, in theory, lead to more Iranian oil on a market already favoring the supply side.

Crude oil prices have traded in a bear market since June as U.S. oil production and storage levels increase. A daily brief from the U.S. Energy Information Administration said U.S. crude oil production increased last year by 1.2 million barrels per day, the largest increase in volume since record-keeping began more than 100 years ago.

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The price for West Texas Intermediate, the U.S. crude oil benchmark, was off 1.3 percent from the previous close to $48.23 per barrel early Monday.

EIA said most of the increase in U.S. oil production came from shale basins in North Dakota, Texas and New Mexico. The low price of oil, however, is forcing energy companies to cut back on spending and EIA said the swift momentum in growth may be coming to an end. "Annual crude oil production is expected to grow at a slower rate, 8.1 percent this year and 1.5 percent next year," a daily brief read.

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