US-Iran Talks Send Oil Prices Higher on Short-Covering Bounce
Oil prices increased on Tuesday as investors awaited potential US-Iran talks at the United Nations General Assembly. The Brent crude futures November contract gained 22 cents, or 0.22%, to $100.57 a barrel. The WTI October contract rose by 2 cents, or 0.02%, to $95.8 a barrel.
The increase in oil prices appears to be driven by short-covering rather than a fundamental shift in the market, according to Tim Waterer, chief market analyst at KCM Trade. Traders who were positioned for further downside are taking some risk off the table as diplomatic efforts between the US and Iran unfold.
Middle East tensions remain elevated after Yemen's Iran-backed Houthis attacked Riyadh and a Saudi Aramco facility in Yanbu. China has urged Tehran to help curb attacks by the Houthis, while Aramco has increased exports through the Strait of Hormuz following recent attacks on its East-West Pipeline.