US oil holds above $51; Saudi comments lay price floor

U.S. crude was trading comfortably above $51 a barrel on Thursday, after comments by Saudi's oil minister predicting a floor for prices and as Iran nuclear talks hit a bump.

U.S. crude futures edged up 11 cents to $51.64 a barrel by 2341 GMT. A 2 percent gain in the previous session narrowed its spread with global benchmark Brent to below $9 a barrel.

Saudi Arabia's oil minister said on Wednesday he expected oil prices, which hit a near six-year low in January, to stabilize, signalling cautious optimism about the market outlook.

Iran rejected on Tuesday as "unacceptable" U.S. President Barack Obama's demand that it freeze sensitive nuclear activities for at least 10 years but said it would continue talks on a deal, Iran's semi-official Fars news agency reported.

Weekly inventory increases have been the norm of late. A week earlier, U.S. crude oil inventories rose by 8.4 million barrels for the week that ended Feb. 19 – more than doubling forecasts of a 4.0 million weekly increase.

U.S. crude stocks rose more than twice as much as expected last week, while gasoline stocks increased and distillate inventories fell, data from the Energy Information Administration (EIA) showed on Wednesday.