Oil was mixed Wednesday in Asian trade ahead of a key US oil inventory report, amid simmering tensions over Iran's nuclear programme, analysts said.

New York's main contract, light sweet crude for January delivery, dropped 29 cents to 78.08 dollars a barrel.

Brent North Sea crude for January delivery was flat at 79.35 dollars a barrel. Both contracts had closed higher Tuesday.

A report from the American Petroleum Institute indicated weaker demand in the United States Tuesday.

It said oil inventories rose by 2.9 million barrels, gasoline stocks were up 3.4 million barrels and distillates up by 1.1 million barrels in the week to November 27.

"Oil looks pretty flat; the API report yesterday was quite bearish but the market is waiting for the EIA data for confirmation," said Ben Westmore at National Australia Bank.

The more closely watched inventory report by the Energy Information Administration is due later Wednesday.

It may show an 800,000-barrel gain in crude stockpiles, a 700,000-barrel build in gasoline inventories and a 300,000-barrel drop in distillate stocks, according to a Dow Jones Newswires poll of analysts.

Simmering geopolitical tensions also affected sentiment as Iran hit out at its long-time nuclear partner Russia over a yes vote for a censure motion at the UN atomic watchdog.

Iran announced Sunday it plans to build 10 new uranium enrichment plants, heaping scorn on a rebuke by the UN atomic watchdog for constructing its second such plant near the Shiite holy city of Qom.

Twenty-five of the 35 members of the International Atomic Energy Agency (IAEA) voted against Tehran and asked it to freeze the building of the plant.

The dollar firmed slightly in Asia Wednesday as the euro fell to 1.5076 dollars from 1.5082.

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