Yukiya Amano, head of the International Atomic Energy Agency said on Friday there was "still a long way to go" to resolve a decade-old dispute over Iran's nuclear program, a note of caution days after Tehran curbed its atomic activity under an interim deal with world powers, Reuters reported.
"The Iranian talks are going smoothly and even if the U.S. doesn't give in too much, we think it will give in to countries that deal with Iran and that's all we need right now for Brent to come off," said Carl Larry, president of Houston-based consultancy Oil Outlooks and Opinions
But not everyone in the market is confident about the early return of Iranian crude.
"The Iranian oil is still a long way off returning to market so do not expect this to be priced in yet, but this will be in the back of traders' minds and we monitor headlines closely," said David Nevin, a London-based energy broker with Tower Broking. A move above $108.42 for Brent would be bullish, Nevin said, and the benchmark may next target $109.50 and $110.20.
(Read more: Oil price caught up in fallout from Iran nuclear deal)
WTI prices, meanwhile, are expected to draw support from pipeline capacity additions in the U.S. aimed at draining a glut of oil at the WTI delivery point in Cushing, Oklahoma.