Oil settled below $90 a barrel as softer economic data from China and a potential breakthrough in negotiations with Iran eased pressure on crude markets.

West Texas Intermediate closed nearly 3% lower after sinking earlier to a six month low. Oil started the week on a bearish note after China announced a surprise cut in key interest rates in response to weak economic data. Meanwhile, Iran signaled a nuclear deal agreement could be reached in the next few days, raising the prospect of Iranian crude returning to the global market. “Most are increasing the probability of an Iranian deal,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management. “I see $80 as significant support and would expect buyers start to get interested at those prices,” she added.

Foreign Minister Hossein Amirabdollahian said in a briefing that the country would inform the European Union Monday evening of its position regarding a final draft text for a finalized nuclear deal, striking a more conciliatory tone than in recent months. A spokesperson for the Iranian foreign ministry said there could be a basis for a signed agreement “in the very near future.”

We’re really seeing where China’s economy is at and it’s a lot less rosy than people had hoped, consumption is going to be lower than anticipated, certainly for oil,” Sucden Financial’s head of research Geordie Wilkes said by phone. China’s economic recovery unexpectedly weakened in July as fresh Covid-19 outbreaks impacted consumer and business spending. Industrial output rose 3.8% from a year ago, lower than June’s 3.9% and missing economists’ forecast of a 4.3% increase. Oil refinning also fell as plants shut for maintenance.

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