Oil prices fell early on Thursday to their lowest level of the past two weeks, after U.S. commercial crude stocks rose more than expected and Iran said the nuclear talks would resume by the end of November.
As of 8:51 a.m. EDT, WTI Crude was down 1.21% at $81.66, while Brent Crude traded down 1.09% at $83.66, after prices had risen for most of October together with a global spike in natural gas and coal prices.
The EIA weekly inventory report from Wednesday halted the most recent rally, after the administration estimated a crude oil inventory build of 4.3 million barrels for the week to October 22. This compared with a modest draw of 400,000 barrels for the previous week and analyst expectations for a build of 1.65 million barrels. The large drop in stocks at Cushing raised some concerns about the inventories at the delivery hub for the WTI futures contract, where inventories are now sitting at a three-year low at just 27.3 million barrels.
Overall, the EIA report was not constructive for oil prices. Nor was an announcement from Iran that the Islamic Republic and EU countries could resume the so-called nuclear talks by the end of November.
"We agree to start negotiations before the end of November. Exact date would be announced in the course of the next week," Ali Bagheri Kani, Iran's top negotiator, tweeted on Wednesday.
The talks between Iran and the global powers about the U.S. and Iran returning to the nuclear deal had stalled before the Iranian presidential election in the summer.
The possibility of Iranian barrels returning to the market had some participants running for the exits late on Wednesday and early on Thursday.
Even if talks result in a deal this time, it would take months for Iran to clear all the hurdles to resuming legitimate oil exports.
Oil prices also suffered from a drop in gas prices in Europe on Thursday after Russian President Vladimir Putin told Gazprom's CEO Alexei Miller that as soon as the Russian gas giant completes filling Russia's underground storage by or on November 8, "I would like you to start consistent and planned work on increasing the amount of gas in your underground depots in Europe - in Austria and Germany," per the English translation on the Kremlin website.
"In addition, this will create a favourable situation, at any rate, a better situation in the European energy market in general," Putin said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More