Oil prices plunged on Tuesday from their highest level since 2014, as investors held their breath for a decision from US President Donald Trump on Iran's nuclear deal.
Many analysts expected Trump not to walk away from the Iran deal without offering any compromise, a hope that dragged oil prices down by around $2.00 on the benchmark WTI index and just a little less on Brent.
But some experts were more pessimistic, leading prices to resist any further falls.
World stocks including the US' were down, meanwhile, as the dollar climbed, with Jasper Lawler at the London Capital Group writing: “It looks like King dollar is back.”
Wall Street stocks fell in early trading on Tuesday, pulling back after two upbeat sessions ahead of a major US announcement on Iran policy.
About 15 minutes into trading, the Dow Jones Industrial Average shed 0.2 percent to 24,304.78.
The broad-based S&P 500 lost 0.3 percent to 2,666.04, and the tech-rich Nasdaq Composite also declined 0.3 percent to 7,246.96.
Speculation he will withdraw the US from the deal fueled petroleum-linked equities and oil prices, which closed on Monday above $70 a barrel in New York for the first time since late 2014.
But petroleum-linked shares were mixed early on Tuesday and oil prices were down, suggesting to some analysts that investors were repositioning after having already bet that Trump will exit the deal.
Shares of 21st Century Fox jumped 2.9 percent following reports cable provider Comcast is lining up financing for a possible bid for key Fox assets.
That would challenge an existing deal between Disney and Fox.
Dow member Disney, which reports earnings later on Tuesday, was down 0.3 percent, while Comcast fell 1.6 percent.
Citigroup jumped 2.3 percent following news activist fund ValueAct Capital Management built a $1.2 billion stake in the bank.
Hertz slumped 10.7 percent after the car-rental company reported a loss of $202 million in the first quarter.
The US president is due at 1800 GMT to announce whether or not to tear up an agreement with Tehran and reimpose painful sanctions that could cut off crude supplies.
“Decision Day for President Donald Trump and the Iran nuclear deal saw oil prices pulling back further from 3.5-year highs as signs that the US may consent to a 'fudge' proposal that's been the subject of furious diplomatic activity for weeks,” noted Ken Odeluga, market analyst at City Index trading group.
Despite being urged by world leaders to honour it, investors fear he will refuse to preserve the 2015 pact, fanning fears of fresh turmoil in the already tinderbox Middle East.
According to the New York Times, Trump told French President Emmanuel Macron on Tuesday he is planning to announce the US' withdrawal from the deal.
Fears of a pullout — along with an output cap by Russia and the OPEC cartel, rising US demand and an improving world economy — had helped send the price of oil to highs not seen since late 2014, though profit-taking saw both main contracts retreat on Tuesday.
Iran has said Washington will regret it “like never before” if Trump walks away from the deal.
Since his election Trump has repeatedly criticised OPEC and Russia over a deal sealed in 2016 that has boosted the price of oil following a slump brought about by a global oil glut.
But now, according to XTB chief market analyst David Cheetham, the price of oil may soar to $80 a barrel “in the not too distant future if the Iranian deal is terminated and sanctions reimposed”.
Cheetham warned that, should sanctions be reintroduced, the impact on the market would far outweigh the effect on prices of the OPEC-Russia deal.
However, for all of Trump's bombastic rhetoric on the Iran deal, Cheetham said the US may eventually have to toe a more diplomatic line.
“In a similar vein to the approach adopted with the steel and aluminium tariffs, the president is likely engaging in a game of brinkmanship to achieve his desired outcome,” Cheetham wrote. “However the stakes here are far higher!”