West Texas Intermediate fell as much as 4.8% to slip below $70 a barrel after media including Israel’s Haaretz said Iran and the US have made progress in talks over the Islamic Republic’s nuclear program. 

“This knee-jerk move lower is likely an over reaction,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “However, the price action demonstrates just how quickly crude can turn lower while it struggles to move higher even when there are positive developments,” she added.

Formerly OPEC’s No. 2 producer, Iran could restore about 1 million barrels of daily crude production within months of a deal, traders and analysts said last year before talks broke down. It could be back to full capacity of about 3.7 million barrels a day by next year.

Asked about the reports yesterday, State Department spokesman Vedant Patel said he would not respond to “rumors or leaks of diplomatic conversations.” “The President has also been clear, as has the Secretary, that we’ve not removed any option from the table, and so I will just leave it at that.” Iranian officials have declined to comment. 

Oil is down 10% this year as China’s sluggish economic recovery, interest rate hikes from the Federal Reserve and robust Russian crude flows weigh on prices. In an attempt to rally prices, Saudi Arabia’s pledged to cut over 1 million barrels a day on top of cuts made by the cartel earlier this year.