London: Brent oil slipped further towards $106 a barrel on Wednesday on optimism over nuclear talks with Iran, a resumption of Libyan crude supply and rising stockpiles in the United States.

World powers aim to reach a preliminary agreement to curb Iran’s nuclear programme in talks resuming in Geneva on Wednesday. A deal may involve easing sanctions on the country that could lead to a rise in its crude exports.

Russia is hopeful that the talks will produce a preliminary deal, Foreign Minister Sergei Lavrov said.

Supreme Leader Ayatollah Ali Khamenei said Iran would not step back from its nuclear rights and his negotiating team had been set limits for the talks.

Bjarne Schieldrop, chief commodity analyst at SEB, said the comments from Iran’s supreme leader were “not a great start” to the second round of negotiations, but was still optimistic that the talks would yield a positive outcome. “I think, despite his statements, the probability of reaching an interim deal looks quite good,” Schieldrop said.

Brent crude for January was down 30 cents at $106.62 a barrel by 1128 GMT, after posting its biggest daily fall in nearly two weeks on Tuesday as Libya resumed some oil exports.

Brent was on track for its biggest weekly fall in a month.

The US crude contract for December, which expires later on Wednesday, was up 10 cents at $93.44 a barrel. It ended the previous session up 0.3 per cent after hitting a five-and-a-half-month intraday low of $92.43.

Libya returns

Oil exports from Libya’s western Mellitah port have resumed after protests ended, allowing a large oilfield to ramp up production and providing some respite from a crisis that has crippled its economy.

Most of Libya’s oil facilities have been closed since the end of July as disparate groups demanding political rights and benefits have put pressure on the government, keeping around 1 million barrels of oil per day out of the market and helping support the price of crude.

US commercial crude oil inventories were forecast to have increased last week, while distillate and gasoline stockpiles were seen down, an expanded Reuters poll of analysts showed on Tuesday.

Data from industry group the American Petroleum Institute showed on Tuesday refinery crude runs rose by 255,000 barrels per day last week. Crude inventories rose 512,000 barrels, less than the 900,000-barrel build predicted in the Reuters poll.