Oil prices closed slightly lower on Tuesday, following a steep 6% drop on Monday, as reports surfaced of potential diplomatic efforts in the Middle East. Brent crude futures fell 30 cents, or 0.4%, to settle at $71.12 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 17 cents, or 0.3%, to $67.21 a barrel. The declines came after news that Israeli Prime Minister Benjamin Netanyahu would discuss a diplomatic solution to the conflict in Lebanon, with Axios reporting that he plans to meet with military and intelligence leaders on the matter. Meanwhile, Iran responded to Israel’s recent military action, saying it would “use all available tools,” according to Iranian Foreign Ministry spokesperson Esmaeil Baghaei.
Oil demand concerns added to market pressure, with weaker Chinese imports weighing on prices despite hopes for economic stimulus from Chinese President Xi Jinping. “Markets tried to stage a modest recovery,” said Andrew Lipow, president of Lipow Oil Associates, but they remain “under pressure from lackluster demand from China and worries about increasing supply.”