Oil prices rose slightly in Asian trade on Tuesday after logging steep losses in the prior session as cooling tensions between the U.S. and Iran cut some risk premium from the commodity.

Crude was also pressured by a stronger dollar, which rebounded sharply from near four-year lows after U.S. President Donald Trump nominated Kevin Warsh as his pick for the next Federal Reserve Chair.

Brent oil futures for April rose 0.2% to $66.42 a barrel, while West Texas Intermediate crude futures rose 0.3% to $61.90 a barrel by 20:11 ET (01:11 GMT).

Get more key price insights on oil by subscribing to InvestingPro

US, Iran to hold nuclear talks this week
The U.S. and Iran will resume talks over the latter’s nuclear ambitions this Friday in Turkey, a host of reports showed.

The talks come after Trump repeatedly warned Iran to accept a deal and floated the potential for military action against the country if an agreement was not reached.

News of the Friday talks helped dispel concerns over a regional war in the Middle East, in turn drawing some risk premium out of oil markets.

Fears of a potential conflict had been a major support point for oil, especially after the U.S. deployed several warships to the Middle East and warned of a potential strike against Iran.

Still, it remained to see whether Friday’s talks would bring a deescalation in tensions, given that earlier negotiations over Iran winding down its nuclear program have yielded limited results.

Dollar rebound weighs on oil; India-US trade deal in focus
Strength in the dollar weighed on oil prices this week, with the greenback seeing extended gains after Warsh’s nomination.

Warsh was viewed as a less dovish pick than markets were expecting. While he is still expected to oversee more interest rate cuts by the Fed, he is also expected to limit the central bank’s asset buying operations, keeping overall monetary policy less loose than markets are hoping.

The dollar rebounded on this notion, pressuring commodity prices across the board. While oil prices sank, precious metals such as gold and silver were by far the worst hit.

Oil markets were also focused on a long awaited trade deal between the U.S. and India, under which the South Asian country will begin buying oil from the U.S. and potentially Venezuela.

India will also cease its imports of Russian oil– which were a major point of contention for Washington. A lack of Indian buyers could in turn further pressure Russia into ending its war with Ukraine.
Source: Investing.com