Oil prices dived as much as 3.5 percent on Tuesday as a media report fed doubts about whether U.S. President Donald Trump would withdraw Washington from the Iran nuclear deal, then bounced from the session low in volatile trade after another report that Trump does plan to withdraw.
The CNN report sparked doubts about whether Trump would impose sanctions on Iran as quickly as the market had expected, a decision that would reduce global crude supplies and feed tensions in the Middle East.
"There`s been some conflicting comments come out of CNN that were bearish, and then countered by the New York Times that were less bearish," said Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said.
"So we`re just getting a lot of this pre-meaning noise that we often get when things... kind of get leaked ahead of time."
Brent crude futures were down 1.8 percent at $74.77 a barrel by 12:01 p.m. EDT (1601 GMT), while U.S. West Texas Intermediate (WTI) crude futures fell 2.4 percent to $69.03. After the CNN report, prices had tumbled as much as 3.5 percent.
Trump on Monday said a decision on whether to remain in the Iran nuclear deal or to impose sanctions would be announced at 2 p.m. EDT (1800 GMT) on Tuesday, four days earlier than expected.
Prices fell more than $3 a barrel moments after the CNN report that said Trump was expected to impose sanctions but may also allow for "a grace period that may offer the deal`s proponents an opening to negotiate."
The New York Times reported that the U.S. was preparing to reinstate all sanctions it had waived as part of the nuclear accord and impose additional economic penalties as well, citing a person briefed on the matter.
One senior European official closely involved in Iran diplomacy told Reuters U.S. officials had indicated late on Monday that Trump would withdraw from the agreement, but it remained unclear on what terms and whether sanctions would be reimposed.
Oil prices had been supported by expectations that Trump would likely pull the United States out of the deal. This could hit Iranian crude exports and also fan the flames of geopolitical tensions in the Middle East, home to a third of the world`s daily oil supply.
Under the deal to limit Iran`s nuclear program, formally known as the Joint Comprehensive Plan of Action, the United States agreed to ease a series of sanctions on Iran and has done so under a string of "waivers" that effectively suspend them.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)