Oil prices drop on Iran deal

Oil prices dropped today (July 14th) after Iran and six world powers reached a nuclear deal which is expected to increase the supply of Iranian crude. Brent crude was down $1.10 (£0.7) a barrel, or 1.9 per cent, at $56.73 a barrel.

US stocks remained little changed his morning, with the S&P 500 futures edging down 0.1 per cent to 2093. The e-mini Dow futures was also down 0.1 per cent to 17889 while the e-mini Nasdaq-100 futures added 0.1 per cent to 4494.

"Even with a historic deal, oil from Iran will take time to return, and will not be before next year, most likely the second half of 2016," Amrita Sen, chief oil analyst at London-based consultancy Energy Aspects, told Reuters.

"But given how oversupplied the market is, with Saudi output at record highs, the mere prospect of new oil will be bearish for sentiment."

Sanctions lifted

The agreement will see some sanctions on Tehran lifted in exchange for restrictions to its nuclear program.

Iran is allowed to carry out specific research and development (R&D) activities for the first eight years of the deal, with further enrichment activities possible afterwards, "for exclusively peaceful purposes". 

Tehran is also not allowed to stockpile large amounts of enriched uranium, with the International Atomic Energy Agency (IAEA) monitoring Iran's nuclear activities. The US Congress will now have 60 days to review the deal.

Stocks in the US have rallied since the start of the week, as Greece reached a bailout deal with its creditors that is expected to avert an imminent economic collapse in the southern European nation.

Greece will receive as much as €86 billion (£61.3 billion) of aid if the country's parliament agrees by Wednesday to pass into law key creditor demands including changes to value-added taxes, broadening the tax base to increase revenue and reducing pension costs.