Oil had come under downward pressure as a plunge in China's
stock market accelerated and the Greek debt crisis raised
concern about fuel demand.Talks in Vienna between Iran and six world powers dragged on beyond a self-imposed deadline as officials on both sides talked of important differences preventing a deal to lift sanctions and so allow more Iranian oil onto world markets.
"Those market participants who have been betting on a rapid Iranian return to the oil market are now likely to square their positions, which should lend short-term support to prices," said Carsten Fritsch, senior oil analyst at Commerzbank.
Brent crude was up 50 cents at $57.35 a barrel by 1010 GMT (6:10 a.m. EDT), having earlier dipped as low as $55.87. On Tuesday, Brent fell to $55.10, its weakest since April 6.
U.S. crude was up 40 cents at $52.73.
Negotiators in Vienna have given themselves at least until Friday to come up with a final deal on the Iranian nuclear program.
A senior Iranian diplomat said on Wednesday Tehran would not show flexibility regarding its "red lines", suggesting financial markets may have been over-optimistic on the prospects of a deal.
Prices gained support from expectations that the latest weekly U.S. inventory data would show a drop in U.S. crude inventories. The American Petroleum Institute's supply report on Tuesday showed a 958,000-barrel decline, ahead of Wednesday's official data.
