Oil prices firmed at under $70 after sliding nearly 5 percent last week due to reduced hurricane concerns with dealers braced for situational rises over the Iran-West nuclear dispute.
The US market was trading electronically on Labor Day but trade was thin. U.S. light sweet crude traded up 30 cents at $69.49 a barrel.
Though Washington pressed for sanctions that oil traders fear could disrupt supplies from the world's fourth-largest exporter, the European Union indicated it wanted more talks.
Iran has been given 2 weeks to clarify its nuclear stance. Iran says it is ready to negotiate but will not halt any enrichment work ahead of talks.
EU foreign policy chief Javier Solana will meet Iran's chief nuclear negotiator, Ali Larijani, next week to try to clear up ambiguities in Tehran's reply to major powers' offer of broad cooperation if it stops the nuclear work.
Tobin Gorey, commodity strategist at Commonwealth Bank of Australia, said that "We're thinking the oil market might downgrade the risk further. A break below $68 would suggest that the downgrade is on."
With the projected number of hurricanes for this season dropping and other supply news being mostly positive over the weekend, has also played a part in the price drop this week as opposed to the closure of 50,000 bpd of Nigerian output.
Authorities in Iraq said they had detained the second most senior Al -Qaeda figure in the country, potentially improving security and freeing a pipeline used to pump 6 million barrales of crude that has been mostly paralyzed by sabotage for the past three years.
Thanks to the Exxon-led Sakhalin-1 field ramping up output, Russian oil production rose 0.9 percent to a record high of 9.759 million bpd in August.
OPEC meets next week to chart output policy and is unlikely to change production even though that may mean that supply is more than market demand.
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