Crude prices fell on 14 July, adding to the losses the day before, as the nuclear deal between Iran and its Western counterparts has reopened oil taps off the Middle East country, but prices soon found support as fresh supply would take time to materialise.
Market analysts do not expect oil tankers from Iran to reach their overseas destinations before the middle of 2016, while oil technical charts show many hurdles before the commodity falls to new multi-year lows.
Brent for immediate delivery had fallen to a low of $56.40, down more than 2% on the day but has rebounded to $57.40 by around 2.30pm GMT.
But analysts added that the market is already highly oversupplied, hence the latest news has become a major bearish trigger.
Meanwhile, Israel has sounded its concerns about the deal saying the concessions awarded to Iran for ensuring the contract could finally help the oil producer develop nuclear arms, which is not favourable for Jerusalem.
At the same time, US President Barack Obama has made a statement that the deal signed by Iran and its Western counterparts poses no threat for the security of his country.
With the political stage remaining complex, traders in crude oil who also look at charts have their own reasons to sell the commodity.
July's slide in Brent has taken it off an uptrend that dates back to January when it hit a multi-year low. The gap down move in the first week of July did materialise a 12.8% slide in the commodity at the 7 July low of $55.08.
Despite the big fundamental negative and the technical bias being downward, spot Brent stays off the low, hit only a few days before the Iran news.
At present, the oil variety is testing the 61.8% Fibonacci retracement of the January-May rally which comes near $54.50. A break of that will take it to near $52.50 and then $48.50 before hitting new multi-year lows.