Oil pared losses to trade above $70 a barrel after the biggest daily jump since April on the back of a hike in U.S. consumer spending and as tensions between Iran and the West lent support.

U.S. consumer spending rose at its fastest pace in nearly eight years in August, advancing for a fourth straight month, according to a government report on Thursday.

U.S. crude futures rose 3 cents to $70.64 a barrel by 1334 GMT, after rising nearly $4 on Wednesday.

Earlier, U.S. crude prices fell by $1 from the previous close to $69.61 a barrel as investors eyed high distillate stocks ahead of the winter.

London Brent crude rose 1 cent to $69.08 a barrel.

Consumer spending sent a positive signal but the market doesn't like it much over $70 and it is likely to come back down after this little bounce, said Global Insight analyst Simon Wardell.

Talks between Iran's top nuclear negotiator and six world powers in Geneva were scheduled for Thursday, which U.S. officials said could offer an opportunity for a rare bilateral meeting with the Iranians.

Tensions over the oil exporter's nuclear program have been a bullish factor in oil markets in recent years.

(Editing by James Jukwey)