Khaberni - Oil prices rose on Thursday to approach their highest levels in 7 months, as investors tried to assess whether talks between the United States and Iran could prevent a military conflict that may disrupt supplies, although an increase in U.S. crude inventories limited the gains.
Brent futures recorded $71.12 a barrel, up 27 cents or 0.3% by 01:23 GMT. West Texas Intermediate futures rose 23 cents or 0.4% to $65.65.
Brent rose 8 cents on Wednesday, while West Texas Intermediate fell 21 cents.
On Monday, both crudes reached their highest levels since July 31 and have not strayed far from those levels as Washington deployed military forces to the Middle East to pressure Iran to negotiate a halt to its nuclear program and ballistic missile programs.
The U.S. envoy Steve Whitcov and Jared Kushner are scheduled to meet with an Iranian delegation on Thursday in Geneva for a third round of talks.
Toshitaka Tazawa, an analyst at Fujitomi Securities, said, "Investors are focused on the prospects of avoiding military conflict in the negotiations between the United States and Iran."
He added that even in the event of a breakout of hostilities, the price of West Texas Intermediate is likely to temporarily rise above $70 per barrel before retracting to a range between $60 and $65, provided that the targets are limited and the conflict is short-lived.
The duration of the conflict could disrupt supplies from Iran, the third largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), and other oil exporters in the Middle East.
U.S. President Donald Trump briefly outlined his reasons for potentially launching an attack on Iran in his State of the Union address on Tuesday, saying he would not allow a country he described as the world's leading state sponsor of terrorism to possess a nuclear weapon.
On Tuesday, Iranian Foreign Minister Abbas Araghchi said that reaching an agreement with the United States was "within reach, but only if diplomacy is prioritized."
