Brent falls below $83 on oversupply concerns

The slump follows concerns of oversupply as Iran and world powers closed on a deal, and a build-up in US inventory

Brent crude oil fell below $83 a barrel on Thursday, as apparent momentum towards a deal between Iran and world powers over its nuclear programme, and a U.S. inventory build, added to concerns of oversupply.

US Secretary of State John Kerry said on Wednesday that a deal between Iran and the P5+1 group of countries would be harder to achieve after a November 24 deadline, suggesting a degree of urgency ahead of planned talks in Oman next week.

"If sanctions on Iran are eased, one needs to review once again the supply and demand balance," said Olivier Jakob of Petromatrix, a Swiss energy consultancy.

Samuel Ciszuk, senior advisor on supply security at the Swedish Energy Agency, told the Reuters Global Oil Forum on Wednesday that he saw the odds of a deal or compromise being reached as "50-50".

Brent crude for December was down 15 cents at $82.80 a barrel by 0915 GMT, after touching a high of $83.24. US crude slipped 10 cents to $78.58.

US crude inventories rose 460,000 barrels in the week to Oct. 31, Energy Information Administration data showed on Wednesday, albeit compared with analysts' expectations of an increase of 2.2 million barrels.

"U.S. domestic production is at its highest level ever, and imports are at their lowest for more than a decade - that's a bearish outlook in the short term," said Tamas Varga, analyst at PVM Oil in London.

Libya's production fell by at least 200,000 barrels a day on Wednesday as gunmen overran the El Sharara oilfield, sources said, providing some support to prices.

Prices spiked sharply on Wednesday as rumours of a pipeline explosion in Saudi Arabia circulated, but fell back as it emerged that the incident was a fire at a diesel pipeline which was quickly brought under control.

A fire was also quickly extinguished at a pumping unit at Rosneft's Saratov oil refinery in Russia's Volga river region, the Emergencies Ministry said on Thursday.