Oil prices rose Tuesday, marking their first gain in five trading sessions as investors monitored potential for diplomatic talks between the United States and Iran at the United Nations General Assembly. Brent crude futures for November delivery rose $1.14 to $101.48 a barrel, while the U.S. West Texas Intermediate (WTI) October contract increased 87 cents to $96.65. Tim Waterer, chief market analyst at KCM Trade, characterized the movement as a "short-covering bounce" following recent declines rather than a shift in market fundamentals.
The price movement coincides with the UN General Assembly in New York, where U.S. President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian. On Sunday, Iran's security chief, Mohsen Rezaei, reportedly conveyed conditions to mediators for re-engaging in negotiations. While diplomatic possibilities emerged, the two nations also exchanged threats on Sunday, and tensions remained high in the Middle East after Yemen's Houthis said they attacked Riyadh and a Saudi Aramco facility in Yanbu.
Supply conditions shifted over the weekend as Saudi Aramco increased crude exports through the Strait of Hormuz. Tanker tracking data showed approximately 14 million barrels were loaded on seven supertankers in the Gulf on Sunday. This followed a suspension of some shipments through the Yanbu port after attacks on the East-West Pipeline. Analysts from Saxo Bank noted that shipments through the strait reached a six-month high, which has helped ease some supply concerns despite historically elevated market volatility.
In Libya, production at the Sharara oilfield experienced a significant decline after an armed group closed a valve on the pipeline to Zawiya port on Monday. Two engineers at the field reported that production fell by approximately 200,000 barrels per day (bpd). Current output at the field is estimated to be between 100,000 and 105,000 bpd.
The fluctuations in the Middle East involve the movement of 14 million barrels of Saudi oil in a single day. Market analysts expect oil prices to remain sensitive to headlines throughout the week, with further price changes likely if diplomatic efforts either progress or stall. The WTI October contract is scheduled to expire on Tuesday, which may lead to additional trading volatility as investors transition to the November contract.