MELBOURNE Reuters -- Oil prices fell in early trade on Tuesday based on the latest progress in the talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market.
Brent crude futures fell by 27 cents, or 0.3%, to $96.38 a barrel at 0027 GMT, paring a 1.8% gain from the previous session.
U.S. West Texas Intermediate WTI crude futures declined 24 cents, or 0.3%, to $90.52 a barrel, after climbing 2% in the previous session.
ANZ Research analysts said that the spectre of a U.S.-Iran nuclear deal continues to hover over the market.
The European Union put forward a final text to revive the 2015 Iran nuclear deal, but it didn't get approval from Washington and Tehran. A senior EU official said that there was a possibility that Iran's oil exports could increase rapidly if the agreement is revived, but there is certainly scope for Iran to increase oil exports within a few weeks.
He said Iran could boost its oil exports by 1 million -- 1.5 million barrels per day, or up to 1.5% of global supply, in six months.
A revival of the 2015 nuclear agreement will likely see oil prices fall sharply, given markets don't believe a deal will be reached, Dhar said.
Following stronger than expected trade data from China on the weekend and the surprising acceleration in U.S. jobs growth in July, signs that demand may not be dented as much as feared are keeping a floor under the market for now.
On Tuesday, traders will be watching the U.S. oil inventory data, first from the American Petroleum Institute and then the Energy Information Administration on Wednesday.
Five analysts polled by Reuters expect crude stockpiles to fall by around 400,000 barrels and gasoline stockpiles to decline by about 400,000 barrels in the week to Aug. 5, while distillate inventories, which include diesel and jet fuel, are unchanged.