Oil prices fell on Thursday after the biggest jump in U.S. crude inventories in three years, with signs of weakness in the physical oil market also weighing on prices, while traders assess the supply implications arising from U.S.-Iran talks.
Brent crude futures were down $1.05, or 1.5%, at $69.80 a barrel by 1235 GMT. WTI futures lost $1.26, or 1.9%, to $64.16.
US crude inventories rose by 16 million barrels last week, Energy Information Administration data showed on Wednesday.
Weakness in the North Sea physical oil market is also weighing on oil prices, said UBS analyst Giovanni Staunovo, adding that markets would focus on the outcome of Thursday's third round of U.S.-Iran talks.
The North Sea physical market underpins the Brent futures contract, prices of which have advanced by about 15% so far this year as potential military conflict between the U.S. and Iran has outweighed expectations of oversupply.
U.S. envoy Steve Witkoff and Jared Kushner are due to meet an Iranian delegation in Geneva on Thursday.
Also on the supply side, Saudi Arabia is boosting oil production and exports in a contingency plan should any U.S. strike on Iran disrupt supplies from the Middle East, two sources familiar with the plan said on Wednesday. "Reuters
