Oil prices rose slightly on Tuesday as investors waited for the outcome of diplomatic talks in Tehran, Iran. Renewed attacks by Yemen's Houthi group on Saudi Arabia also raised concerns about risks to oil supplies.
Brent crude futures rose by 45 cents, or 0.39%, to $116.26 a barrel by 0918 GMT on Tuesday. US West Texas Intermediate (WTI) crude futures increased by 40 cents, or 0.39%, to $102.16 a barrel, Reuters reported.
Oil prices recover after early losses
Both Brent and WTI crude had traded around 1% lower earlier in the session before recovering their losses and moving into positive territory. Officials from Saudi Arabia, Turkey and Pakistan met Iranian officials in Tehran on Monday. The talks aimed to reduce tensions in the Middle East, Reuters reported.
Iran talks aim to ease Middle East tensions
Iran's state media reported that the four countries agreed to continue talks to strengthen cooperation on peace and security. Investors are watching whether diplomatic efforts can help ease regional tensions.
Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, said oil prices remained high because of ongoing geopolitical uncertainty. She added that some investors booked profits earlier in the session as they hoped for progress in talks between the US and Iran, Reuters reported.
Brent crude prices cross $117 a barrel
Brent prices surged above $117 a barrel last week, reaching their highest level since April. The rise followed a wave of Iranian attacks on oil tankers around the Strait of Hormuz. Brent crude also touched $117 on Monday.
Houthi attacks raise oil supply concerns
Hopes for peace remained uncertain after Yemen's Iran-aligned Houthi group launched renewed attacks on Saudi Arabia, a major oil producer. The attacks showed that security risks remain in the Middle East, Reuters reported.
October has seen the highest number of attacks on commercial ships in the Strait of Hormuz and nearby waters. The data comes from a Washington-based think tank that has tracked ship security incidents around the world since 2017.
Gulf oil exports fall for fourth week
Crude oil exports from the Gulf region declined for a fourth consecutive week. At the same time, oil flows through the Strait of Hormuz stood at around 60% of their normal level, according to an ANZ Research note cited by Reuters.
Global inventories of distillates, a group of fuels that includes diesel, remained nearly 5% below their five-year average, according to ANZ Research. Low oil stocks and lower oil supplies could increase concerns about fuel shortages.
Investors were also monitoring Israel's general election on Tuesday. They were watching how changes in foreign or trade policies could affect the Middle East conflict and oil prices.