Oil prices fell more than 1% as markets focused on ongoing U.S.– Iran talks.

Oil prices fell in Asian trading on Thursday as traders pared back risk premiums after the U.S. and Iran confirmed talks would take place on Friday.

Crude was also weighed down by a stronger U.S. dollar, which firmed ahead of key January nonfarm payrolls data due on Friday. Attention was additionally focused on major central bank meetings in Europe and the UK later on Thursday.

Prices reversed some of Wednesday’s strong gains as investors locked in profits, though oil remained on track for a weekly decline after earlier losses driven by a broader selloff in commodity markets.

Brent crude futures for April slipped 1.4% to $68.50 a barrel, while West Texas Intermediate futures fell 1.3% to $63.80 a barrel by 20:42 ET (01:42 GMT).

Earlier, oil had found support from data showing U.S. inventories declined more than expected last week, as extreme cold weather disrupted production across the country.

U.S.– Iran talks are set to be held in Oman on Friday.

U.S. and Iranian officials are due to meet in Oman on Friday, as confirmed by both sides this week, though disagreements persist over the scope of the talks.

Washington has repeatedly pushed for the discussions to include Iran’s missile program, while Tehran has said it is only willing to negotiate on its nuclear activities. These differences had earlier raised doubts about whether the meeting would go ahead, a factor that helped lift oil prices earlier in the week.

Markets have also priced in a higher risk premium for crude amid concerns that U.S. President Donald Trump could follow through on threats to launch new strikes against Iran.

A stronger dollar weighs on markets as investors await central bank meetings and upcoming payrolls data.

A firmer dollar added pressure to oil prices, as the greenback attracted strong demand this week.

Expectations around interest rate decisions from the Bank of England and the European Central Bank on Thursday prompted traders to move into the dollar, while attention also remained on upcoming U.S. nonfarm payrolls data.

The dollar rebounded sharply from near four-year lows after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, a choice seen as less dovish by markets.

Investors are now focused on January nonfarm payrolls data due on Friday, which is expected to provide clearer signals on the future path of U.S. interest rates.

Sources: Ambar Warrick