The price of oil fell below $92 a barrel Monday as Libyan production continued to ramp up and the possibility of increased crude exports from Iran raised the prospects of excess supply on global markets.
Benchmark U.S. oil for February delivery was down 92 cents to close at $91.80 in New York. Brent crude, used to set prices for international varieties of crude used by many U.S. refineries, was down 50 cents to $106.75 a barrel in London.
Iran and six world powers announced a plan Sunday to implement a six-month interim agreement on the Islamic Republic's nuclear program. Some economic sanctions against Iran will be eased while Tehran has agreed to limit its uranium enrichment and allow international inspectors access to its nuclear facilities.
The looser sanctions may make it easier for Iran's oil industry, which has seen its exports severely limited by the sanctions, to begin selling more crude after the deal takes effect Jan. 20, experts said.
"Up to 1 million barrels of Iranian oil per day could become available," said analysts at Commerzbank in Frankfurt in a note to clients. "Unless oil production was cut elsewhere, this would give rise to a considerable oversupply on the oil market, which would weigh on prices."
But some analysts say it is the rebound in Libyan production that is having a more important effect on near-term oil prices. Production has increased to about 650,000 barrels per day, the country's oil minister said Sunday. That's still less than half than the nation produced during a recent peak in 2012, but it's much higher than the low of 200,000 barrels per day the country was producing late last year.
If Libya can return to full production, global oil prices could slide further. "We suspect that this will have a larger impact on prices in the coming months than the growing signs of detente between Iran and the West," wrote Julian Jessop, head of commodities research at Capital Economics.
The national average retail price of gasoline fell less than a penny to $3.31 per gallon Monday. That's a penny less than last week and the same as it was a year ago.
In other energy futures trading in New York:
— Wholesale gasoline fell 3.5 cents to close at $2.634 a gallon.
— Natural gas rose 22.1 cents to close at $4.274 per 1,000 cubic feet.
— Heating oil fell 0.8 cents to close at $2.933 a gallon.
AP Writer Pablo Gorondi contributed to this report from Budapest.