Oil hits two-week low on Iran talks and US stocks build

Oil prices slumped to their lowest in two weeks on Thursday after Iran said talks with world powers on its nuclear programme would resume by the end of November and US crude inventories rose by much more than expected.

Brent crude dropped $1.07, or 1.3%, to $83.51 a barrel by 1020 GMT, having hit a two-week low of $82.32 earlier and fallen by 2.1% in the previous session.

US West Texas Intermediate (WTI) crude was down $1.20, or 1.5%, at $81.46 having earlier touched a two-week low of $80.58 and dropped 2.4% on Wednesday.

Iran's top nuclear negotiator Ali Bagheri Kani on Wednesday said the country's talks with six world powers to try to revive a 2015 nuclear deal will resume by the end of November.  

A deal could pave the way to lifting harsh sanctions imposed by former US president Donald Trump on Iran's oil exports in late 2018.

"Even if the talks resume and turn out to be successful, it is still likely to be quite some time before any agreement is reached and Iranian oil exports return to the market," Commerzbank said.

Crude stocks rose by 4.3 million barrels last week, the US Energy Department said, more than double the 1.9 million barrel gain forecast by analysts.

The hefty stocks build was because of a large jump in net imports of crude oil while refinery processing remained sluggish, Citi Research analysts said in a note.

Yet gasoline stocks fell by 2 million barrels to their lowest in nearly four years, even as US consumers contend with rising pump prices.

At the WTI delivery hub in Cushing, Oklahoma, crude storage is the most depleted for three years, with prices for longer-dated futures contracts indicating supplies will remain low for months.

Outbreaks of coronavirus infections in China and record deaths and the threat of lockdowns in Russia, along with rising cases in western Europe, also weighed on prices.