Oil prices rose on Tuesday for the first time in five sessions as investors assessed the possibility of renewed talks between the United States and Iran, while increased crude shipments through the Strait of Hormuz helped ease some supply concerns.
Brent crude futures for November rose USD 1.14, or 1.1 per cent, to USD 101.48 per barrel at 0317 GMT. West Texas Intermediate crude for October, which expires on Tuesday, gained 87 cents, or 0.9 per cent, to USD 96.65 per barrel. The more actively traded November WTI contract was up 85 cents, or 0.9 per cent, at USD 93.22 per barrel.
The rebound followed four consecutive sessions of losses. Attention has shifted to potential diplomatic engagement between Washington and Tehran during the United Nations General Assembly in New York this week.
US President Donald Trump has said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York for the UN meeting. The comments followed an exchange of threats between Washington and Tehran on Sunday. Iran has also conveyed conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iranian security chief Mohsen Rezaei.
Middle East Tensions Keep Supply Risks In Focus
Tensions in the Middle East remained elevated after Yemen's Iran-backed Houthis said they had attacked Riyadh and a Saudi Aramco facility in Yanbu. The group has also 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 after Saudi Arabia approached Beijing following an increase in the group's military operations, according to three Iranian sources.
Meanwhile, Saudi Aramco 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 Saudi crude were loaded onto seven supertankers inside the Gulf on Sunday, tanker-tracking data showed.
Saxo Bank analysts said supply concerns were easing as shipments through the Strait of Hormuz reached a six-month high and Saudi Arabia worked to restore its East-West Pipeline. Crude implied volatility declined 3.3 per cent to 50.39, although it remained high by historical standards.
Libya's Sharara Output Drops
Elsewhere, 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, according to Libya's National Oil Corporation.
Production at the field has fallen by around 200,000 barrels per day and was running at between 100,000 and 105,000 barrels per day, according to two engineers at the field.
(With inputs from Reuters)