Oil prices drop as positive signals on Iran nuclear talks raise the prospect of a massive supply influx

Hopes for an influx of more crude supply were raised after signs that talks to revive the Iran nuclear deal yielded some progress.

According to sources, Iran's response to the EU's last-ditch effort to restore the deal was positive.

US oil fell back below $90 a barrel after hitting a six-month low, while the price of oil in Europe fell as well. By midday Tuesday, West Texas Intermediate was off 2.65% and the price ofBrent crude was down 2.5%.

Iran agreed to freeze its nuclear program in exchange for relief from sanctions in a deal brokered by the Obama administration.

The US was pulled out of the agreement by the president. Parties to the agreement have been looking for ways to revive it since Joe Biden was elected.

Iran holds about 100 million barrels of oil in storage, and energy analysts say the country could add 1 million barrels a day of production within a few months of sanctions being lifted.