Oil prices extended their sharp decline in Asian trading on Thursday on reports that Iran expressed willingness to reach a nuclear deal with U.S. President Donald Trump, while an unexpected build in U.S. crude inventories raised concerns about oversupply.

As of 21:13 ET, Brent crude futures expiring in June fell 1.6% to $65.04 a barrel, while West Texas Intermediate (WTI) futures fell 1.7% to $61.62 a barrel.

Both crude oil contracts fell on Wednesday, interrupting a four-day winning streak and retreating from two-week highs reached earlier in the week. The previous rise came as the United States and China agreed on Monday to temporarily reduce high tariffs they had imposed on each other.

Ali Shamkhani, a senior political and nuclear adviser to Iran's Supreme Leader Ayatollah Ali Khamenei, said Iran is ready to sign a nuclear deal with U.S. President Donald Trump if the United States lifts all economic sanctions, NBC News reported on Thursday.

The comments were the clearest public statement yet from Khamenei’s inner circle that Iran is willing to reach a negotiated solution, provided that U.S. actions match its rhetoric.

The comments come as U.S.-Iran nuclear talks continue, with U.S. officials describing recent rounds as positive.

However, investors are skeptical because Trump has vowed to exert "massive maximum pressure" on Iran.

A day earlier, the U.S. Treasury Department sanctioned a network it said was transporting Iranian crude for China.

The U.S. Energy Information Administration (EIA) reported on Wednesday that commercial crude oil inventories increased by 3.5 million barrels in the week ended May 9, totaling 441.8 million barrels.

The increase contrasted with analysts' expectations for a 2 million-barrel decrease.

The unexpected increase in inventories could reflect a short-term supply glut or a drop in demand.

The market reaction was swift, with US oil prices falling more than $1 a barrel following the EIA report as traders interpreted the inventory increase as a sign of potential oversupply.

This comes as OPEC+ continues to aggressively increase production, fuelling concerns about oversupply.