Oil prices fell Tuesday as global powers and Iran raced to reach a deal on Tehran's nuclear program that could ease sanctions on the crude producer, adding to the global oversupply.

US benchmark West Texas Intermediate for May delivery lost ground for the third day in a row, losing $1.08 to $47.60 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for delivery in May, the global benchmark, tumbled $1.18 to settle at $55.11 a barrel.

Marathon talks in Lausanne, Switzerland, looked set to miss a self-imposed Tuesday midnight deadline (2200 GMT) to agree the outlines of a agreement that could lead to an easing of sanctions placed on Iran based on beliefs that it was developing a nuclear weapon.

As the deadline nears late Tuesday, Washington said there had been "enough progress" to keep going into Wednesday.

"An Iranian nuclear deal could mean an eventual increase in Iranian supply that has the potential to turn a passing surplus into a more persistent oversupply" on the global market, said Tim Evans of Citi Futures.

Commerzbank analysts, citing shipping sources, said that Iran has at least 30 million barrels of oil in storage onboard tankers.

"In other words, it could make an additional one million barrels of crude oil available per day for at least a month if sanctions were to be lifted, without even having to ramp up its oil production," putting immediate pressure on the market, Commerzbank said in a research note.

The stronger dollar also weighed on oil, which is priced in the US currency. The euro was down to $1.0746 around 1845 GMT, from $1.0825 late Monday, on Greek debt pressures.

Meanwhile, traders awaited the Department of Energy's weekly US oil inventories report Wednesday, expecting another increase in crude stockpiles to a new record high.