UPDATE 3-Brent slips to near $108 ahead of Iran nuclear talks

Tuesday, 19 Nov 2013 | 4:42 AM ET

* World powers and Iran resume talks on nuclear deal on Wednesday

Beirut blasts target Iranian embassy, heightening tension

* Worries resurface over ending of Fed's stimulus

* Coming up: API weekly inventories data; 2130 GMT

By Ron Bousso

SINGAPORE, Nov 19 (Reuters) - Brent slipped towards $108 a barrel on Tuesday as investors eyed this week's round of talks between world powers and Iran that could lead to an easing of sanctions on the oil-rich country.

Renewed concern about the possible tightening of monetary policy in the United States further undercut prices.

January Brent crude fell 15 cents to $108.132 a barrel by 0925 GMT, down for the third straight session. U.S. crude for December edged down 11 cents to $92.92.

The six major powers and Iran will meet from Wednesday to try to forge an interim deal on Tehran's nuclear programme.

U.S. Secretary of State John Kerry on Monday pressed Iran to finalise a deal, but said he has "no specific expectations" for talks in Geneva.

Sanctions on Iran have kept around 1 million barrels per day (bpd) of oil from the global market and any deal could allow some of that oil to be sold, depressing a market that is already well supplied.

"It seems likely some deal will be signed between the parties over the weekend. It will probably be interim and won't mean much in terms of relief on oil sanctions but it will give important time frame for the next steps," said Petromatrix analyst Olivier Jakob.

Two blasts targeted the Iranian embassy in Beirut on Tuesday, leaving at least 18 dead and reviving fears that the 2-1/2-year conflict in Syria could spill over into the neighbouring Lebanon.

Ongoing supply disruptions in Libya supported Brent futures. Fighting between rival militias and industrial unrest have spread across the country, causing its crude exports to fall by more than 1 million bpd over the past six months.

U.S. crude futures posted their biggest daily loss in nearly a week on Monday after top Fed officials pointed to improvements in the U.S. economy that could spur the central bank to start "tapering" its $85 billion-a-month stimulus programme.

Comments from likely incoming Fed chief Janet Yellen last week had suggested the central bank would continue with its ultra-loose monetary policy for some time.

Many in the markets do not expect any change until March.


The price gap between West Texas Intermediate (WTI) and Brent may widen to $15 this week if U.S. oil data showed higher inventories, said Yusuke Seta, a commodity sales manager at Newedge Japan.

"WTI is leading the crude market downwards because production in the U.S. is increasing steadily and inventories in Cushing are rising," he said.

U.S. crude inventories were forecast to have increased by 100,000 barrels last week, while gasoline supply grew by 200,000 barrels, according to a Reuters poll.

Industry group the American Petroleum Institute will release its weekly data later on Tuesday while the U.S. Energy Information Administration will report its data on Wednesday.