Investing.com - Oil prices were on the backfoot on Tuesday, pulling back from three-and-a-half-year highs, as investors braced for President Donald Trump's decision on whether to withdraw from the Iran nuclear deal.
Trump will announce his decision, which comes four days earlier than the May 12 deadline, from the White House at 2:00PM ET (1800GMT).
A senior U.S. official said it was unclear if efforts by European allies to address Trump's concerns would be enough to save the pact, but European diplomats said privately they expected Trump to effectively withdraw from the agreement.
Should Trump pull the U.S. out of the agreement, Iranian crude exports could be hit, adding to tightness in the oil market.
Iran, which is a major Middle East oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran's nuclear program.
New York-traded WTI crude futures slumped 70 cents, or around 1%, to $70.03 a barrel by 9:10AM ET (1310GMT). The U.S. benchmark settled above $70 for the first time since November 2014 on Monday after rising as high as $70.84.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 51 cents, or 0.7%, to $75.66 a barrel, after climbing to $76.34 in the last session, its highest since November 2014.
Market analysts said the fall in prices was akin to "buy the rumor, sell the news" kind of behavior for markets, which had initially expected a statement from Trump only later in the week.
Investors will also focus on fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT), amid forecasts for an oil-stock drop of around 1.1 million barrels.
In other energy trading, gasoline futures inched up 0.3% to $2.127 a gallon, while heating oil declined 0.4% to $2.176 a gallon.
Natural gas futures were a shade higher at $2.751 per million British thermal units.