US oil settles down 95 cents, or 1.9%, at $49.14 a barrel

How Iran sanctions work
How Iran sanctions work

Oil prices closed lower on Thursday after global powers negotiating a deal with Iran announced they had reached solutions on key parameters of the country's nuclear program.

U.S. crude futures closed down 95 cents, or 1.9 percent, at $49.14 a barrel, after touching $48.11 earlier. were down 3.6 percent to $55 a barrel, after hitting a session low of $54 during the press conference.

Framework measures, if implemented by Iran, would eventually result in the European Union and United States easing sanctions related to Iran's nuclear program. In an "international joint venture," Iran would cut its nuclear capacity while agreeing to monitoring and modernization of its facilities.

A final deadline for the talks was set for June 30.

Prices fell as much as 5 percent after the announcement, which capped more than week of talks in Lausanne, Switzerland between Iran and the United States, Britain, France, Germany, Russia and China.

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A nuclear pact for Tehran could remove Western sanctions on the OPEC nation's oil exports, bringing millions of additional Iranian crude barrels onto a market already brimming with supply.

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Oil prices were under pressure earlier after oil services firm Baker Hughes reported the number of rigs drilling for oil in the United States declined by 11 this week to 802, the smallest decline since December.

The data, which was released a day earlier due to the Good Friday holiday, compares with declines of 12 and 41 rigs in the prior two weeks and is a sign the collapse in drilling over the past few month has reached its low point.

After a precipitous drop since October, the U.S. oil rig count is nearing a pivotal level that experts say could begin to dent production, bolster prices and even coax oil companies back to the well pad in the coming months.

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Oil prices snapped a three-session losing streak on Wednesday after the U.S. Energy Information Administration said U.S. oil production dropped last week for the first time since late-December.

Despite the data showing U.S. production falling, U.S. crude oil inventories climbed last week to a record high for the 12th straight week.

The EIA said U.S. crude stocks rose 4.8 million barrels to 471.4 million barrels in the week to March 27.

—CNBC staff contributed to this report.