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Crude oil futures fall below $90 a barrel

Prices fell to the lowest level in nearly seven months on hopes of a deal between Iran and the United Nations nuclear watchdog.

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Oil traders on the floor of the New York Mercantile Exchange. (Justin Sullivan/Getty Images)

Crude oil futures fell below $90 a barrel for the first time this year today as hopes of a deal between Iran and the United Nations nuclear watchdog eased fears of a supply disruption, Reuters reported.

According to the Associated Press, the latest US weekly oil data showing stockpiles remained at 22-year highs also weighed on prices.

Growing speculation that Greece will leave the euro zone and a slowing Chinese economy also dampened demand.

In early afternoon trade in New York, crude for July delivery was down $2.22, or 2.42 percent, at $89.63 a barrel, according to MarketWatch.

Prices haven’t traded below $90 a barrel since November 1, the AP said.

Officials from the United Nations and six world powers, including the United States, are holding talks with Iran in Baghdad over its controversial nuclear weapons program, the Los Angeles Times reported.

They hope to persuade Tehran to limit its uranium-enrichment program. 

For its part, Iran hopes to convince the West to lift, or at least ease, crushing economic sanctions that have targeted its oil exports and cut off the country from lucrative markets.

On the eve of the talks, the UN nuclear watchdog said Tehran had agreed in principle to let inspectors resume their investigations into the country's nuclear activities. 

Yukiya Amano, director-general of the International Atomic Energy Agency, said he expected a deal to be signed soon, according to the LA Times.

“If there were to be further rapprochement between the conflicting parties, or indeed if the prospect of an easing of sanctions were to be raised, the risk premium would be likely to fall further, bringing oil prices down accordingly,” analysts at Commerzbank said in a note, MarketWatch reported.

More from GlobalPost: IAEA says Iran nuclear deal coming 'soon'

http://www.globalpost.com/dispatch/news/regions/americas/united-states/120523/crude-oil-futures-fall-below-90-barrel