Oil prices rose on Wednesday after US President Donald Trump denied he would be willing to ease sanctions on Iran while Qatar pushed for peace talks, after falling in the previous session on a recovery in crude supply from the Middle East.
The Brent futures November contract, which is expiring on Wednesday, rose 71 cents, or 0.69%, to $103.30 a barrel by 0408 GMT. The more active December contract rose 35 cents to $96.51. US West Texas Intermediate crude gained 43 cents, or 0.48%, to $89.81.
Brent is headed for a monthly gain of around 14%, its biggest climb since July, while WTI is on track for a 4% rise after having breached $106 for the first time since May.
The spread between the two benchmarks this month also expanded to its widest in four months as traders watched potential plans by the US to restrict diesel exports, which could create an oversupply in the domestic market and lead US refiners to process less crude.
US President Donald Trump is considering allowing sales of red-dyed diesel, instead of an export ban, to offer some price relief to consumers as the November midterm elections loom.
“Continued uncertainty over sanctions relief and negotiations is keeping a geopolitical risk premium embedded in prices,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
“Improving supplies could cap further gains, but renewed disruption or an escalation in tensions could trigger another rally,” she added.
Qatar said on Tuesday it hopes that shuttle diplomacy between Iran and the US can lead to a breakthrough.
However, Trump denied an Axios report that cited US officials as saying he was willing to give Iran sanctions relief and release frozen Iranian funds in return for “concrete” steps by Tehran on its nuclear programme.
On Tuesday Saudi Arabia resumed oil tanker loadings from its Red Sea port of Yanbu after restarting operations on the East-West Pipeline.
Crude oil exports from Middle East producers have rebounded in September to 16.328 million barrels per day, the highest since the US-Israeli war with Iran started in late February.
“With flows through the Saudi East-West pipeline restored, regional exports are now just 11% below pre-war levels — a remarkable recovery for a region still at war,” J.P. Morgan research said in a note.
Over the past five days, the 10-day average for total oil exports has held at 20.5 million barrels per day, or 89% of 2025 levels, J.P. Morgan estimated.
In the US, crude oil and gasoline inventories rose, while distillate stocks fell last week, market sources said on Tuesday, citing data from the American Petroleum Institute.
Official inventory data from the US Energy Information Administration is due at 10:30 a.m. EDT (1430 GMT). Analysts polled by Reuters expect crude and product inventories to have fallen.
(Reporting by Mohi Narayan and Helen Clark; Editing by Sonali Paul)