Oil prices tumbled today as Iran and six world powers appeared to be closing in on a nuclear deal that would end sanctions on the Islamic Republic and let more Iranian oil on to world markets.
News of a unanimous agreement by European leaders on a bailout loan for Athens, which should allow Greece to stay in the euro zone, helped pare early losses.
Brent crude for August fell $1.89 to a low of $56.84 a barrel before rallying back to around $57.70. US light crude, also known as West Texas Intermediate (WTI) CLc1, was down 60 cents at $52.14 a barrel.
Iran and six world powers were on the brink of finding a nuclear deal that would bring sanctions relief in exchange for curbs on Tehran's nuclear programme, officials and diplomats said.
A senior Iranian negotiator said a nuclear deal would be signed but cautioned there was work to be done and he could not promise the talks would conclude tonight or tomorrow.
"I cannot promise whether the remaining issues can be resolved tonight or tomorrow night," Iran's Tasnim news agency quoted Deputy Foreign Minister Abbas Araqchi as saying.
The chance of Iran adding to a global oil surplus at a time of weak demand led some analysts to forecast more oil prices falls.
Bank of America Merrill Lynch said US crude prices "could soon drop well below our $50 per barrel target" in the third quarter of 2015.
Commerzbank said a fall below $55 per barrel in Brent and below $50 per barrel in US crude was "conceivable".
Although analysts say it would take until 2016 before Iran would be able to return to full-scale exports, most estimate that a jump of around 200,000 barrels per day in exports could be seen in the short term, adding to a current surplus of about 2.6 million barrels a day.
With oversupply ongoing and abundant economic risk, several banks have lowered their oil price forecasts.
Meanwhile, oil prices had pared early sharp losses after European Council President Donald Tusk said euro zone leaders had "unanimously reached agreement" on a deal for Greece.
Prime Minister Alexis Tsipras confirmed Greece had secured debt restructuring and medium-term financing in a growth package worth €35 billion in a deal with its creditors.