International benchmark Brent regained ground after tumbling as much as 5 per cent on Thursday when Iran reached a preliminary deal on its nuclear programme with six world powers. More Iranian oil could enter global markets if that is followed by a comprehensive deal by June.
But expectations of an immediate increase in supply have been tempered as analysts warned a ramp-up in exports could take months and would likely not happen before 2016.
“While clearly a bearish headline, a final deal and full lifting of sanctions still faces a number of obstacles,” Morgan Stanley analysts said.
“Even if a final deal is reached, we do not expect any physical market impact before 2016.”
Brent crude for May delivery LCOc1 touched a high of $56.90 a barrel. US crude for May delivery CLc1 was $1 higher at $50.14 a barrel, after earlier touching $50.97.
The world’s top exporter Saudi Arabia kept output steady and cut its official selling prices (OSPs) sharply late last year in a fight for market share during a global supply glut.
Its ability to raise prices for April and May suggests its strategy is working, although competition has kept its flagship Arab Light at a discount to Oman/Dubai quotes, analysts said.