Oil prices slipped on Tuesday as traders weighed the impact on supply from Russia-Ukraine peace talks and US-Iran negotiations, strong front-month physical demand in Asia and a cautious outlook for China's economy.

Brent futures for July dipped 19 cents to $65.35 a barrel by 0625 GMT.

June U.S. West Texas Intermediate crude futures, which expire on Tuesday, gained 3 cents to $62.72, while the more active July contract slipped 17 cents to $61.97 a barrel.

Discussions on Iran's nuclear programme would "lead nowhere" if Washington insisted that Tehran slash uranium enrichment activity entirely, state media quoted Deputy Foreign Minister Majid Takhtravanchi as saying on Monday.

The remarks came after U.S. special envoy Steve Witkoff reiterated on Sunday that Washington would require any new deal to include a pact to refrain from enrichment, a precursor to the development of nuclear bombs.

A deal would have paved the way for the easing of U.S. sanctions and allowed Iran to raise oil exports by 300,000 barrels to 400,000 barrels per day, StoneX analyst Alex Hodes said.

Prices were also supported by expectations of near-term firm physical demand, amid healthy refining margins in Asia.

"The Asian buying cycle got off to a very mild start, but strong margins and the end of maintenance should still prove supportive," said Sparta Commodities' analyst Neil Crosby.

Singapore complex refining margins, a regional bellwether, hovered at more than $6 a barrel on average for May, LSEG data showed, up from April's average of $4.4 a barrel.

Markets were eyeing Russia-Ukraine peace talks for a direction on Russian oil flows, which could swell supply and weigh on prices.

"Energy markets have been focused on potential peace talks, with an eventual deal possibly leading to an easing of sanctions against Russia," ING analysts said in a note to clients.

A U.S. sovereign downgrade by Moody's also dampened the economic outlook for the world's biggest energy consumer, pinning back oil prices.

The ratings agency cut the U.S. sovereign credit rating by one notch on Friday, citing concerns about its growing debt of $36 trillion.

Piling more pressure on oil prices was data showing decelerating industrial output growth and retail sales in China, the world's top oil importer, with analysts expecting a slowdown in fuel demand.

In a client note, BMI analysts projected a decline of 0.3% in 2025 consumption on the year, hit by a slowdown across oil product categories.

"Even if China adopts stimulus measures, it may take time to have a positive impact on oil demand," they added.

Source: Investing.com