Oil futures settled sharply lower on Thursday with traders betting that a preliminary deal on Iran’s nuclear program will only add to excess supplies that have been weighing on prices. Ahead of Friday’s holiday for the energy markets, May crude fell 95 cents, or 1.9%, to settle at $49.14 a barrel on the New York Mercantile Exchange. Prices, which tapped an intra-day low of $48.11 on Thursday, settled about 0.6% higher than last Friday’s close.

The fall for West Texas Intermediate prices on Nymex was much more modest than it was for the Brent crude global benchmark, narrowing the price spread between the two crudes to less than $6. May Brent crude on London’s ICE Futures exchange sank $2.15, or 3.8%, to $54.95 a barrel. It lost roughly 2.7% from its close last Friday.

The oil market had been concerned that an agreement would lead to an easing of sanctions on Iran, which would in turn be able release much more of its oil onto world markets. Under the agreement reached on Thursday, the U.S. will end all nuclear-related sanctions on Iran. “The Iran nuclear deal is a massive blow for the oil price and we could see the crude-oil price falling to $30 very easily,” said Naeem Aslam, chief market Analyst at AvaTrade.  Some analysts estimate that the lifting of oil sanctions would lead to an addition of around 800,000 barrels a day in global markets and that Iran’s return to the oil market would be “long and arduous.”

Charles Perry, chief executive officer of energy-consulting firm Perry Management, said Iran’s oil production has “suffered a long time from the lack of reinvestment of capital into it” and a reinvestment into its oil business has not been enough to “even just maintain, much less expand it.” All told, Perry doesn’t expect to see the removal of sanctions alone to have much of an impact on Iran’s oil industry.

Meanwhile, reporting its data a day early, Baker Hughes said the number of U.S. rigs actively drilling for oil and natural gas as of April 2 fell by 20 rigs from last week to 1,028.