The American Petroleum Institute will release estimates of crude, gasoline and distillate stocks last week later Tuesday, which come ahead of more closely-watched data on the same from the Department of energy on Wednesday.
On the New York Mercantile Exchange, WTI crude for May delivery fell 0.79% to $48.26 a barrel.
Overnight, crude oil prices slid on Monday as a deadline for a deal regarding Iran's nuclear program neared, exacerbating concerns that a relaxation of sanctions on Iranian oil exports could add significantly to the glut in global oil supply.
A late rally in the final minutes of trading on Monday pared previous losses, after a State Department spokesperson said there's a "50-50 chance," an agreement with Iran will be reached by Tuesday. While crude futures gained more than a dollar a barrel just before the close, the last-minute rebound failed to offset an earlier sell-off.
In Lausanne, Switzerland, a bevy of foreign ministers from major world powers met with Iran, reportedly pressing Iranian leaders to budge on the final critical details of a long-awaited agreement. The sides have set a deadline for Tuesday at midnight to reach an agreement on a preliminary outline for a deal aimed at limiting Iran's capabilities enough to keep a nuclear bomb out of reach.
Hampered by heavy economic sanctions over the last three years, Iran has reportedly exported just over a million barrels of crude oil a day since 2012. An easing of sanctions could depress crude prices due to heightening supply.
Iran holds the world's fourth-highest level of crude oil reserves, according to the Energy Information Administration (EIA), a supply level (of 157 billion barrels) that amounts to approximately 10% of total global crude storage. The rigid sanctions, in turn, have boosted Iranian oil supply. Iran reportedly has hoarded 30 million barrels of oil on its fleet of offshore supertankers, Reuters reported last week.
Opec, meanwhile, said in a mid-March report that heavy crude oil prices in Iran increased to $53.26 for the month of February, a spike of more than $10 a barrel from the prior month. Iranian Oil Minister Bijan Namdar Zanganeh has set a production target of 5.7 million barrels per day of crude oil by 2018, the Tehran Times reported according to official Iranian government statements.
The Iranian prices for crude are slightly below current futures for the international benchmark. On the Intercontinental Exchange (ICE), Brent for May delivery fell 0.37% or 0.21 to $56.20 a barrel on Monday.
Global oil supply is approaching record levels in large part due to the Shale boom throughout the United States. In the U.S. oil is being pumped at its fastest rate in more than 30 years.
As a result, U.S. storage capacity has hovered around 60% in recent weeks -- more than doubling from its level of 12 months ago.
If the U.S. reaches storage capacity at some point this summer, there are mounting fears that crude oil could plunge below $30 a barrel. Oil futures are currently down more than 50% from the triple-digit levels reached last July.
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