Oil slides over 2% as easing supply fears follow planned US-Iran talks
Brent crude futures were down $1.73, or 2.5 per cent , at $67.73 per barrel at 1402 GMT. US West Texas Intermediate crude was down $1.67, or 2.5 per cent , at $63.47
 "Oil slides over 2% as easing supply fears follow planned US-Iran talks")
Oil prices fell more than 2 per cent on Thursday but held close to multi-month highs after the US and Iran agreed to hold talks in Oman on Friday.
Brent crude futures were down $1.73, or 2.5 per cent , at $67.73 per barrel at 1402 GMT. US West Texas Intermediate crude was down $1.67, or 2.5 per cent , at $63.47.
Oil prices are strongly influenced by tensions in the Middle East, with markets closely watching the talks in Oman, said UBS analyst Giovanni Staunovo.
The discussions come as the US builds up forces in the Middle East, and regional players seek to avoid a military confrontation that many fear could escalate into a wider war.
About a fifth of the world's total oil consumption passes through the Strait of Hormuz between Oman and Iran. Other OPEC members, Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, export most of their crude via the strait, as does Iran.
PVM Oil Associates analyst John Evans said that ahead of Friday's meeting the market would likely drift, with hopes of a diplomatic breakthrough.
"However, there will be no comfort as such in prices, for one untoward remark or a breakdown in talks and the Brent price will soon be banging on the door of $70 a barrel and looking at year-to-date highs," he said.
Volatility has led investors to rush to lock in oil prices this year, trading a record number of WTI Midland at Houston contracts in ??January, amid concerns around Middle Eastern supply risks and more Venezuelan barrels heading to the US Gulf Coast.
Strength in the U.S. dollar and volatility in precious metals also weighed on commodities and risk sentiment more broadly on Thursday, analysts said.
On the supply side, discounts on Russian oil exports to China widened to new records this week as sellers cut prices to attract demand from the world's top crude importer and offset the likely loss of Indian sales, traders said.
This comes after a trade deal announced between the US and India earlier in the week where the latter agreed to halt purchases of Russian crude.
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