Oil prices turned positive on Tuesday after falling about 1% earlier in the session. The chance of talks in Tehran eased supply fears, but renewed Houthi attacks on Saudi Arabia highlighted persistent risks.
Oil prices turned positive on Tuesday as the chance of talks in Tehran eased fears of a broader Middle East supply shock. However, renewed attacks by Iran-aligned Houthis on key producer Saudi Arabia showed that the scope for peace looked fragile.
Brent and WTI edge higher
Brent crude futures were up 40 cents, or 0.4%, at $116.24 a barrel by 0718 GMT. US West Texas Intermediate crude rose 30 cents, or 0.3%, to $102.07. Both had fallen 1% earlier in the session.
Diplomacy meets fresh attacks
Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday aimed at easing tension in the Middle East. Iranian state media said the four countries agreed to continue talks with a view to strengthening cooperation in peace and security.
Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm, said: "Prices remain elevated amid persistent geopolitical uncertainties". She added that earlier profit taking was fuelled by hopes of a breakthrough in talks between the US and Iran.
Hormuz attacks keep the market exposed
Last week, Brent surged to more than $117 a barrel, the highest since April, after a wave of Iranian attacks on tankers around the Strait of Hormuz. Brent touched $117 on Monday as well. Data from a Washington-based think tank shows October has been the worst month for attacks on commercial shipping in the strait and nearby waterways since it began tracking in 2017.
The strait carried about a fifth of global energy supplies before the conflict erupted in February. ANZ Research said in a note that the oil market is vulnerable, with stress across supply, logistics, inventories and refining. The note added that Gulf crude exports fell for a fourth straight week, and flows through the strait were just about 60% of their normal level.
Source: Investing.com
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