SINGAPORE, Nov 18 (Reuters) -Brent crudeslipped toward $108 a barrel on Monday as traders focused on a resumption of talks betweenIranand major powers that may lead to a rise in oil supply.But internal strife inLibyaand expectations of U.S. stimulus measures continuing for longer supported prices.
Investors were also assessing how energy reforms pledged byChinalate last week will impact oil and gas demand in the world's largest net oil importer.
Brent rose 3.2 percent last week afterFranceblocked a deal withIran. A speech by Janet Yellen, the next chairman of the U.S. Federal Reserve, had also put fears of tapering at ease, supporting global equity andcommoditymarkets.
January Brent crude edged down 23 cents to $108.27 a barrel by 0319 GMT whileU.S. crudefor December delivery was at $93.59, down 25 cents.
"The Middle East risk premium has wound back quite a bit probably because there is less potential for major supply declines with constructive news from Iran," said CMCMarketschief analyst Ric Spooner in Sydney.
Major world powers and Iran will engage in another round of "tough" talks in Geneva on Nov. 20-22. Sanctions against Iran because of its nuclear programme have kept some 1 million barrels of oil per day off the global market. Any agreement among nations could mean sanctions will be lifted, increasing market supply and depressing prices.
"One should probably not be too cynical and have one's mind open to the possibility of constructive developments over time," Spooner of CMC Markets said.
The kidnapping of Libya's deputy intelligence chief on Sunday highlighted the country's internal strife which has sharply reduced its oil exports.
In the United States, investors will scour Fed Chairman Ben Bernanke's speech and minutes of the central bank's October meeting for hints on when it might start paring its asset-buying programme. Yellen's speech last week signalled that the Fed will need stronger evidence of economic growth before tapering.
U.S. oilfuturesposted their sixth straight week of losses last week as rising local supply widened its gap with Brent to about $14 a barrel ahead of the U.S. December contract's expiry on Wednesday.
Money managers cut their net long U.S. crudefuturesand options positions in the week to Nov. 12 for the second week in a row, the U.S.CommodityFutures Trading Commission (CFTC) said on Friday.
By Reuters
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