Oil prices rose sharply on Thursday as investors expect leading producers to stick to production policy, ignoring earlier concerns over the resumption of talks on Iran's nuclear programme, which could lead to more oil exports from Tehran.
Brent and US West Texas Intermediate crude futures fell more than 1 per cent as traders turned their attention to a meeting of the Organisation of Petroleum Exporting Countries and its allies, including Russia, known as OPEC, later on Thursday, according to Exness Forex.
The group is expected to confirm plans to maintain steady monthly supply increases, despite calls for an acceleration.
Brent crude rose 47 cents, or 0.6 per cent, to $82.46 a barrel by 07:51 GMT, while WTI crude rose 2 cents to $80.88 a barrel after falling to $79.74 a barrel.
Prices fell earlier after Iran and the six powers agreed on November 29 to resume talks on reopening the 2015 nuclear deal in Vienna. Iran demanded that the US lift sanctions restricting its oil exports.
The news of the resumption of nuclear talks between the US and Iran has probably dashed recent hopes that OPEC would raise production targets, supporting prices, OANDA senior analyst Geoffrey Halley said.
Citi analysts believe OPEC is likely to stick to its current policy despite pressure from oil importers.
"Most OPEC members cannot raise production from current levels... while even Saudi Arabia has stressed the need to be cautious about demand growth given the increase in COVID cases while increasing oil production," the bank said in a statement.
OPEC sources said leading producers Saudi Arabia and Russia were also more confident that rising oil prices would not prompt a quick reaction from the US shale industry, reflecting a desire to rebuild earnings and supporting arguments against a faster increase in OPEC production.
However, several major oil companies plan to increase production or spending on shale oil next year, which could undermine OPEC's efforts to control supply and maintain prices.
Both benchmarks posted their biggest daily percentage declines since early August on Wednesday, with Brent closing at its lowest level since October 7 and WTI at its lowest level since October 13, after weekly inventory data from the US Energy Information Administration showed a larger-than-expected rise in oil stocks last week.