U.S. oil futures rebounded on Wednesday and benchmark Brent pared losses as OPEC member Iran reinforced its opposition to a nuclear deal with timelines, helping the market recover from an earlier price slide tied to big U.S. crude supplies.
Comments from Saudi Arabia's oil minister that supply and demand for oil in the global market should stabilize soon and that prices ought to stabilize from the selloff of recent months also helped put a floor beneath Wednesday's trading, dealers said.
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Some also found the Federal Reserve's Beige Book report anticipating cuts in capital expenditure for oil and gas producers in certain U.S. districts as positive.
U.S. crude settled up $1.01 at $51.53 a barrel, reversing a near $1 drop from earlier in the day.
Brent was down 57 cents at $60.45 a barrel at 2:41 p.m. EST (1941 GMT), off the day's low of $59.47.
Oil prices initially slid after U.S. government data showed domestic crude stocks having risen by 10.3 million barrels last week, more than double the 4-million-barrel build forecast by analysts in a Reuters poll. While some market bulls regarded the data showing a smaller-than-expected supply growth in the Cushing, Oklahoma hub for U.S. crude as positive, it still amounted to an eighth straight week of record highs for total inventories.
But within two hours of the data, the market began recovering after Tehran's ambassador to the International Atomic Energy Agency (IAEA), Reza Najafi, said no deal had been reached with world powers on the duration of any possible final agreement that covers Iran's nuclear program.
Iran, in negotiations with six world powers, had rebuffed as "unacceptable" comments by U.S. President Barack Obama on Monday that any accord should last at least a decade.
Fear that a quick nuclear deal for Iran could lift U.S. and other Western government sanctions on Tehran and flood the market with new oil exports from the OPEC member caused Brent to tumble 5 percent on Monday.
"The market certainly seems to have jumped off on the latest Iran news, after earlier pricing in a nuclear deal and removal of sanctions," said John Kilduff, partner at New York energy hedge fund Again Capital.
Saudi Arabia was another factor in supporting the market, traders said.
Saudi Oil Minister Ali al-Naimi said on Wednesday he expected supply and demand of oil to reach a balance soon and prices to stabilize. His remarks, made in a speech in Berlin, came after a hike on Tuesday in official selling prices (OSPs) of Saudi crude delivered to Asia and the United States.
(By Barani Krishnan; Additional reporting by David Sheppard in London and Florence Tan in Singapore; Editing by Kevin Liffey, Chris Reese and Diane Craft)