Brent oil bounced back from a three-month low to around $57 a barrel on Wednesday after an industry report showed a larger-than-forecast drop in U.S. crude stocks and Iran nuclear talks failed to produce a deal.
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 LCOc1 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.