Brent fell 60 cents, or 0.9%, to $68.27 a barrel by 1121 GMT.
U.S. West Texas Intermediate (WTI) crude fell 57 cents, or 0.9%,
to $65.64 a barrel.
"Despite supportive inventory data from the United States on
Wednesday, crude oil remains stuck in a sideways environment
with Brent trading between $65 to $70 per barrel," said UBS oil
analyst Giovanni Staunovo.
U.S. crude stocks, gasoline and distillate inventories fell last
week, the Energy Information Administration said, as a gradual
lifting of coronavirus restrictions boosted road fuel demand. [EIA/S]
"Mobility data out of Europe and the U.S. benefiting from a fast
vaccine rollout are price supportive, but I guess market
participants want to get more clarity how nuclear talks in
Vienna evolve, which caps prices," Staunovo added.
Iran and global powers have negotiated in Vienna since April to
work out steps Tehran and Washington should take to secure the
lifting of sanctions on Iran, including its energy sector, in
return for Iranian compliance with restrictions on its nuclear
work.
Those talks will be a major issue for a June 1 meeting of the
Organization of the Petroleum Exporting Countries and allies, a
group known as OPEC+. The producers will have to assess whether
to change plans for easing production curbs against the prospect
of Iranian supply returning to the market.
Analysts said any increase of supply from Iran would only be
gradual, with JP Morgan estimating Iran could add 500,000
barrels per day (bpd) by the end of this year and a further
500,000 bpd by August 2022.
Japanese refiners need at least three months to resume Iranian
oil imports even if nuclear talks lead to an agreement and a
lifting of sanctions, said Tsutomu Sugimori, president of the
Petroleum Association of Japan (PAJ).
Despite support for oil from a bigger-than-expected drawdown in
U.S. oil inventories, concerns remain about demand shrinking in
India, the world's third-largest oil consumer.
A possible extension of COVID-19 emergency measures in Japan has
also raised demand concerns.
Investors are awaiting U.S. jobless claims data, due later on
Thursday, which will show the pace of U.S. economic recovery.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Sonali Paul in Melbourne and Koustav Samanta in
Singapore; Editing by Christopher Cushing and Bernadette Baum)
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