Oil prices fell on Wednesday as investors digested the likely impact of increasing Iranian fuel exports at a time of heavy oversupply.
A milestone nuclear deal reached on Tuesday between six world powers and Iran will mean sanctions that have limited sales of Iranian oil for several years are likely to be lifted in early 2016.
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An official at the National Iranian Oil Company said on Wednesday that Iran's oil production could increase by 500,000-600,000 barrels per day (bpd), confirming the prospect of a ramp-up in supply from a nation that holds some of the world's largest oil reserves.
Iran could reach its pre-sanctions level of 4 million bpd within six to 12 months if there is enough demand, he said.
Most analysts agree that first Iranian oil exports could enter the global market in early 2016, but their estimated additional volumes vary between 300,000 and 700,000 bpd.
Iran, a member of the Organization of the Petroleum Exporting Countries, exported almost 3 million bpd of crude at its peak before Western sanctions reduced shipments to about a million bpd over the past two and a half years.
Analysts at Goldman Sachs estimate Iran could supply an extra 200,000-400,000 bpd in 2016 on top of a release of 20-40 million barrels from floating storage.
"We view the 2016 prospects for higher OPEC production, including from Iran, as a growing downside risk to our oil price forecast," Goldman Sachs analysts said in a note to clients.
Goldman's current forecast is for Brent to average $58 a barrel in 2015 and $62 next year, while it expects U.S. crude to average $52 and $57 respectively this year and next year.
By 1445 GMT on Wednesday Brent crude was down 57 cents at $57.94 a barrel. U.S. futures were 46 cents lower at $52.58.
Traders are also keeping an eye on China, one of the world's top energy consumers, which has seen slowing growth. It reported stable economic growth for the second quarter on Wednesday at an annual rate of 7 percent.
French bank Natixis said there was a risk of oil prices falling further if China's economy slows while global oil production stays close to record highs.
A savage correction shaved about 30 percent off China's stock markets in the past month, prompting Beijing to introduce support measures to help stem the tide but also raising concerns about the government's ability to manage the economy.
(Additional reporting by Henning Gloystein in Singapore; Editing by Christopher Johnson and Susan Fenton)