Oil drops over 2%, Brent below $65

Oil drilling rigs

Oil prices plunged in early session today, May 15, amid expectations of a potential nuclear agreement between the United States and Iran. In addition, a surprise increase in US crude oil inventories last week exacerbated investor concerns about a supply glut.

Brent crude was trading down 2.3% at $64.57 a barrel, at 08:06 am Makkah time. West Texas Intermediate (WTI) crude slumped 2.35% to $61.66 a barrel.

"Fresh selling was triggered by expectations that a US-Iran nuclear deal would ease recently tightened US sanctions on Iran, potentially loosening the global crude supply-demand balance," said Yuki Takashima, Economist at Nomura Securities, according to Reuters.

Earlier, the Energy Information Administration data showed that US crude oil inventories rose by 3.5 million barrels to 441.8 million barrels in the week ended May 9, contrary to analysts' expectations for a decrease of 1.1 million barrels.

The International Energy Agency's oil report is scheduled for release later today, after OPEC lowered its forecast for oil supply growth from the US and other producers outside the OPEC+ alliance to 800,000 barrels per day in 2025, compared to last month's forecast of 900,000 barrels per day.