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Brent crude eased 2 cents to $101.20 a barrel by 1033 GMT, while
U.S. West Texas Intermediate crude was down 22 cents, or 0.2%,
at $94.67 a barrel.
Comments on Monday by Saudi Energy Minister Prince Abdulaziz bin
Salman about a disconnect between the futures and physical
markets in which he flagged the possibility that OPEC+ could cut
production have helped push oil prices to three-week highs.
"The suggestion that the price did not align with fundamentals
and that OPEC+ could cut output has clearly had the desired
effect," Oanda analyst Craig Erlam said.
"It may also make the chance of a move back below $90 in the
near-term hard to come by unless a nuclear deal is agreed upon
and OPEC+'s appetite for cuts put to the test," he added.
Talks between the European Union, the United States and Iran to
revive the 2015 nuclear deal are continuing, with Iran saying it
had received a response from the United States to the EU's
"final" text to resurrect the agreement.
Falling U.S. crude and product stockpiles also added to the
upward pressure on prices. Oil inventories fell by 3.3 million
barrels in the week to Aug. 19 at 421.7 million barrels, steeper
than analysts' expectations in a Reuters poll for a
933,000-barrel drop.
The bullish impact was countered by a drawdown in gasoline
inventories that was less than expected, reflecting tepid
demand.
U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6
million barrels, compared with earlier expectations for a 1.5
million-barrel drop.
(Additional reporting by Jeslyn Lerh in Singapore; Editing by
Emelia Sithole-Matarise)
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