Oil prices steadied today following sharp falls in the past two days amid signs of prolonged talks over Iran and an unexpected sharp rise in already bulging US fuel inventories.
The sharp drops this week reignited a sell-off that began in early August, deepening the market's sharpest correction in 15 years and potentially forcing Opec to finally name the level at which it will cut output to support prices. US light crude for November delivery rose 31 cents to $61.05 a barrel.
The previous front-month October contract expired at $60.46, its lowest settlement since March 20th, having traded at another six-month low of $59.80. London Brent crude was up 17 cents at $60.64 early this morning.
US distillates inventories, which include heating oil, rose by an unexpectedly hefty 4.1 million barrels last week to stand at their highest level since January 1999, US data showed yesterday.
Crude stocks fell 2.8 million barrels but remained in the upper range for this time of the year.
The chances of securing a political end to the nuclear impasse over Iran appeared to be rising after world powers and Iranian President Mahmoud Ahmadinejad welcomed more talks.
Fears that Iran, the world's fourth-largest oil exporter, would cut oil exports if sanctions against it were passed have dissipated over the past month, pushing prices sharply lower.