Oil prices dip as Iran nuclear deadline approaches

Oil sank Tuesday as dealers tracked last-ditch efforts between global powers and Iran to reach a deal on Tehran's nuclear programme and ease sanctions imposed on the key crude producer.

In late afternoon London deals, Brent North Sea crude for delivery in May slid 63 cents to $55.66 per barrel.

US benchmark West Texas Intermediate (WTI) for May shed 51 cents to $48.17 a barrel.

"Oil prices fell further on Tuesday amid concerns that talks in Iran may prove fruitful and result in the lifting of sanctions on the country?s export of oil," said CMC Markets analyst Jasper Lawler.

Tough talks to reach a framework deal to curtail Iran's nuclear programme may go past a midnight deadline into Wednesday, a top US official acknowledged.

Diplomats and experts were "working around the clock", the senior State Department official said.

"Our team is evaluating where we are throughout the day and making decisions about the best path forward," the official added, asking not to be named.

"We will of course keep working if we are continuing to make progress, including into tomorrow, if it's useful to do so. At this time, no decisions have been made about our travel schedule."

The announcement that the US team may be seeking to buy more time ahead of Tuesday's midnight deadline came as diplomats reported that despite initial high hopes, progress had been slower than desired in the past nail-biting hours.

"Today marks the deadline by which a solution is supposed to be found in the nuclear talks with Iran," said Commerzbank analyst Carsten Fritsch.

"The considerable efforts undertaken in recent weeks, plus the fact that the foreign ministers of those nations taking part in the negotiations have travelled to Lausanne, make it unlikely that the talks will fail completely."

An army of technical and sanctions experts had worked into the early hours Tuesday, exchanging documents to form the basis of an accord.

The two sides hope to seal a political framework aimed at ending a nuclear standoff that has been threatening to escalate dangerously for 12 years.

US Secretary of State John Kerry, in Lausanne since last Wednesday in the latest in a series of meetings around the world with his Iranian counterpart Mohammad Javad Zarif, said late Monday there "still remain some difficult issues."

Under the deal, due to be finalised by June 30, the powers want Iran to scale back its nuclear programme to give the world ample notice of any dash to make a bomb by extending the so-called "breakout" time.

In return diplomatically isolated Tehran, which denies wanting atomic weapons, is demanding the lifting of sanctions that have strangled its economy.

With the world's fourth biggest oil and second biggest gas reserves, the energy industry is the cornerstone of Iran's economy, but it has been hit hard by the US and European embargo imposed since 2012.