Oil prices dipped after both France and Iran said parties are closer to an agreement to salvage Iran's 2015 nuclear deal with world powers.
A successful outcome to the negotiations in Vienna could see Iran make a return to international oil markets – giving a boost to the amount of crude on the market.
Claudio Galimberti, senior vice president of consultancy Rystad Energy, told Reuters: "Positive news from the US-Iran nuclear negotiations is providing much-needed relief to global oil prices, as the possibility of new crude supplies reduces the supply-demand deficit.”
Iran has massive oil reserves, which have been put at more than 150 billion barrels.
An agreement in Vienna could see Iran adding 500,000 barrels daily to global supply between April and May, and another 800,000 bpd by the end of the year.
Oil prices have been at their highest for more than seven years as producing countries struggle to increase output and also on fears of a possible Russian invasion of Ukraine.
This morning, the April contract for Brent crude was down by 1.13% to $93.74 a barrel, while the March contract for West Texas Intermediate slipped by 1.02% to $92.70.
Meanwhile, European Commission president Ursula von der Leyen has insisted the bloc can cope if Russia decides to “weaponise” gas supplies amid tensions over Ukraine.
She said a number of countries were ready to step up shipments of gas to Europe and it was now on the “safe side” for keeping households and businesses supplied this winter.
Speaking in the European Parliament amid ongoing concern that Russia is set to invade Ukraine, Ms Von der Leyen added the EU needed to “diversify our energy sources, to get rid of the dependency of Russian gas”.
The Telegraph says the EU gets about 40% of its gas from Russia, which has been accused of worsening a global shortage of the product by restricting extra spot market supplies to Europe.
Critics argue it is trying to put pressure on Germany to kick-start its new Nord Stream 2 pipeline to Germany under the Baltic Sea which would allow it to bypass Ukraine as a transit route.
The global shortage of gas supplies has triggered a surge in prices in Europe and the UK since last summer, forcing governments to intervene to protect households.
The EU has spoken with the US, Qatar, Egypt, Azerbaijan, Nigeria and South Korea about increasing gas deliveries.
Britain gets little gas directly from Russia but does import from Europe, meaning prices in both markets are closely linked.
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The UK’s top share index, the FTSE 100, finished yesterday down five points at 7,603.
It was down four points at 7,599 shortly after opening this morning.
Companies reporting today
Finals: Moneysupermarket.com, Reckitt, Standard Chartered
Trading updates: Aveva, Safestore Holdings
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