Oil prices gained for the first time in five sessions on Tuesday as investors awaited developments on potential US-Iran talks at the United Nations General Assembly this week after more supplies emerged through the Strait of Hormuz over the weekend.
The Brent crude futures November contract rose $1.14, or 1.1%, to $101.48 a barrel at 0317 GMT. The WTI October contract, which expires on Tuesday, climbed 87 cents, or 0.9%, to $96.65 a barrel.
The more actively traded November contract was up 85 cents, or 0.9%, at $93.22 a barrel.
Tehran and Washington exchanged threats on Sunday, though US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the UN meeting.
“The move higher in WTI and the stronger open in Brent have the appearance of a typical short-covering bounce after the recent decline, rather than a fundamental shift,” said Tim Waterer, chief market analyst at KCM Trade.
“Traders who were positioned for further downside are taking some risk off the table while the diplomatic narrative plays out.”
Over the weekend, Iran also conveyed its conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iran’s security chief, Mohsen Rezaei.
Waterer said oil prices were likely to remain range-bound and sensitive to headlines until there was either clear progress or a setback in diplomatic efforts between the US and Iran.
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Middle East tensions remained elevated after Yemen’s Iran-backed Houthis said they attacked Riyadh and a Saudi Aramco facility in Yanbu and stepped up efforts to cut off Saudi-backed forces from the Red Sea coast.
China has privately urged Tehran to help curb attacks by the Houthis, three Iranian sources said, after Saudi Arabia appealed to Beijing following a recent surge in the group’s military operations.
Saudi Aramco has increased exports through the Strait of Hormuz after attacks on its East-West Pipeline forced it to halt some shipments through Yanbu. Around 14 million barrels of its crude oil were loaded on seven supertankers inside the Gulf on Sunday, tanker tracking data showed.
“Supply concerns are easing as shipments through the Strait of Hormuz reach a six-month high and Saudi Arabia works to restore its East-West pipeline…Crude implied volatility eased 3.3% to 50.39, although it remains historically elevated,” said Saxo Bank analysts in a client note.
Separately, an armed group closed valve seven on Libya’s Sharara crude pipeline to Zawiya port on Monday, resulting in a significant decline in production at the Sharara oilfield, Libya’s National Oil Corporation said in a statement.
Production at the field has fallen by around 200,000 barrels per day and is currently between 100,000 and 105,000 bpd, two engineers at the field told Reuters.
