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By Bloomberg

Oil extended losses from a third quarterly drop as negotiators signaled they’ve reached consensus on major points of a nuclear deal with Iran that may allow the OPEC producer to increase crude exports.

Futures fell as much as 1 percent in New York after closing at a one-week low Tuesday. The foreign ministers of Russia and Iran said a statement may be drafted Wednesday, a day after talks were scheduled to have ended with an outline agreement. U.S. crude stockpiles probably expanded from a record last week, a Bloomberg survey showed before a government report.

Oil is sliding further after the longest run of quarterly declines since 2003 amid speculation Iranian supplies will add to a global glut that cut prices by almost half last year. Diplomats are seeking to reach a pact that would curb the Persian Gulf nation’s nuclear program in exchange for lifting sanctions. Iran tied Kuwait as OPEC’s third-largest producer in March, according to data compiled by Bloomberg.

“Iran has a huge capacity to produce and people are worried about that,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “Especially when you’re adding that into an already oversupplied market.”

West Texas Intermediate for May delivery decreased as much as 48 cents to $47.12 a barrel in electronic trading on the New York Mercantile Exchange and was at $47.29 at 2:24 p.m. Sydney time. The contract fell $1.08 to $47.60 on Tuesday, the lowest close since March 24. Total volume was about 49 percent below the 100-day average.

Nuclear Deal

Brent for May settlement slid as much as 36 cents, or 0.7 percent, to $54.75 a barrel on the London-based ICE Futures Europe exchange. It lost $1.18 to $55.11 on Tuesday. The European benchmark crude traded at a premium of $7.67 to WTI.

U.S. and European ministers didn’t brief reporters after negotiations adjourned at about 1:30 a.m. in Lausanne, Switzerland. One official said the Russian and Iranian claims were exaggerated and the two sides still had issues to resolve before they can agree to end the 12-year standoff.

Iran can boost shipments by 1 million barrels a day if sanctions were lifted, Oil Minister Bijan Namdar Zanganeh said March 16. It may be hoarding 7 million to as much as 35 million barrels, shipbrokers and government officials estimated, which Barclays Plc and Societe Generale SA predict would be sold abroad first should a nuclear pact be reached.

U.S. Inventories

The Organization of Petroleum Exporting Countries, the 12- member group that supplies about 40 percent of the world’s oil, produced 31 million barrels a day in March, according to data compiled by Bloomberg. That’s the most since August 2013. Iran pumped 2.85 million a day, the fastest pace in a year.

Crude stockpiles in the U.S., the world’s biggest oil consumer, probably rose by 4.2 million barrels in the week ended March 27, according to the median forecast in the Bloomberg survey of eight analysts before the Energy Information Administration’s report.

Supplies climbed the prior 11 weeks through March 20 to 466.7 million barrels, the highest level in weekly data compiled by the Energy Department’s statistical arm since August 1982. Output accelerated to 9.42 million a day, the most since at least January 1983.

Inventories gained by 5.2 million barrels last week, data from the industry-funded American Petroleum Institute showed Tuesday, according to reports on Twitter.

In China, a factory gauge rebounded in March, indicating that stimulus efforts have began bolstering the economy in the world’s second-largest oil consumer. The government’s manufacturing Purchasing Managers’ Index was 50.1 last month, up from 49.9 in February, according to the statistics bureau and the China Federation of Logistics and Purchasing in Beijing. Readings above 50 signal expansion.