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Crude Oil Lower; Iran Talks and Hefty U.S. Stocks Weigh

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By Peter Nurse

Investing.com -- Oil prices weakened Thursday, falling for the second consecutive day after Iran indicated that talks would start shortly over its nuclear program, while U.S. crude stocks rose more than expected.

By 9:30 AM ET (1330 GMT), U.S. crude futures were down 0.7% at $82.06 a barrel, hitting a one-week low, after dropping 2.4% on Wednesday. Brent futures dropped 0.8% at $83.22 a barrel, falling to its lowest level in two weeks having dropped over 2% during the previous session.

U.S. Gasoline RBOB Futures were down 0.5% at $2.3665 a gallon.

Oil prices have retreated from multi-year highs after data released Wednesday from the U.S. Energy Department showed U.S. crude stocks rose by 4.3 million barrels last week, more than double the 1.9 million-barrel gain expected.

This was also above the 2.3 million-barrel gain suggested by the industry-funded American Petroleum Institute on Tuesday.

Oil prices hit a seven-year high on Tuesday, driven up by continued robust demand in the United States and the tight global supply situation, but the rise in U.S. stocks hints that the demand growth in the world’s biggest consumer may be slowing.

This comes as U.S. economic growth slowed more than expected in the third quarter, with gross domestic product expanded at a 2% annualized rate following 6.7% growth in the second quarter.

Adding to the negative tone Thursday was the news from Iran's top nuclear negotiator that Tehran is set to resume talks, last held in June, aimed at reviving its 2015 nuclear deal by the end of November.

Iran is seeking to remove U.S. sanctions prohibiting the sales of its oil to the world imposed by former U.S. President Donald Trump in late 2018.

European natural gas prices also fell Thursday after Russian President Vladimir Putin ordered Gazprom (MCX:GAZP) to focus on filling its European storage sites from Nov. 8, a day after it completes the process in Russia.

The move will “create a more favorable situation on the European energy market,” Putin said at a meeting broadcast on state television Wednesday.

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