Oil rises slightly ahead of potential US-Iran talks

Oil prices edged higher on Tuesday as the market found stability following a series of declines, with traders eyeing potential discussions between the United States and Iran at the United Nations General Assembly. The Brent crude futures November contract rose 22 cents, or 0.22%, to $100.57 a barrel, while the WTI October contract gained 2 cents, or 0.02%, to $95.80 a barrel. The November contract was up 13 cents, or 0.14%, at $92.49 a barrel.

Tensions between Iran and the US escalated over the weekend, with both nations exchanging threats. However, President Donald Trump indicated his willingness to meet with Iranian President Masoud Pezeshkian, who is expected to attend the UN General Assembly in New York. This potential meeting has contributed to the short-covering bounce in WTI prices, rather than a significant change in the market fundamentals, according to Tim Waterer, chief market analyst at KCM Trade.

Traders who had taken positions for a further decline are now reducing their risk while monitoring the diplomatic developments.

In addition to the US-Iran talks, Iran communicated its conditions for re-engaging in negotiations to mediators, as reported by Al Jazeera. The country's security chief, Mohsen Rezaei, shared these demands. Oil prices are expected to remain range-bound and influenced by headlines until there is clear progress or a setback in the diplomatic efforts between the US and Iran.

Middle East tensions remain high following attacks by Iran-backed Houthis in Yemen. The group allegedly attacked Riyadh and a Saudi Aramco facility in Yanbu, intensifying efforts to disrupt Saudi-backed forces along the Red Sea coast. China has privately urged Iran to help curb Houthi attacks, according to three Iranian sources who said Saudi Arabia had appealed to Beijing following a recent surge in the group's military operations.

Saudi Aramco has increased crude oil exports through the Strait of Hormuz since attacks on its East-West Pipeline forced the company to halt some shipments through Yanbu. The company loaded around 14 million barrels of crude oil onto seven supertankers in the Gulf on Sunday, according to tanker tracking data. Meanwhile, Libya's National Oil Corp Chairman Massoud Suleman reported a partial reduction in production at the Sharara oilfield, though he did not specify the reason for the decrease.