(Reuters) - Brent crude tumbled nearly 4 percent on Monday on speculation of a nuclear deal that could boost Iran's oil exports, and U.S. crude rose by almost 2 percent as traders bet the gap between the two would narrow.
Iranian Foreign Minister Mohammad Javad Zarif said a deal on Iran's nuclear programmer's could be concluded this week if the United States and other Western countries had sufficient political will and agreed to remove sanctions on Tehran.
Iranian oil exports have been restricted by sanctions for several years as the United States and Europe responded to Tehran's nuclear programmer's, although Iran says its nuclear plans are peaceful.
Analysts say Iran could increase its oil sales fairly quickly if sanctions were lifted and may eventually be able to raise exports by up to 1 million barrels per day (bpd). A Reuters survey last week showed Iran pumped around 2.8 million bpd in February.
Brent was also pressured initially by rising Libyan output and a firmer dollar that weighed on greenback-denominated commodities. [USD/]
In the case of U.S. crude, its advance versus Brent came after a smaller-than-expected build in the Cushing, Oklahoma delivery point, reported by oil services firm Genscape.
"The Genscape expectations for a slower rise in crude at Cushing and returning production in Libya reverses the dynamic in play last week when Brent was rallying on sensitivity to supply disruptions and big gains in Cushing inventories were weighing on U.S. crude," said Phil Flynn, analyst at Price Futures Group in Chicago.
Brent was down $2.32, or 3.7 percent, at $60.26 a barrel by 11:46 a.m. EST (1646 GMT).
U.S. crude rose 75 cents, or 1.5 percent, to $50.51.
Brent's premium to U.S. crude was at below $10 a barrel, after reaching above $13 earlier on Monday.