New york: Oil prices rose on Thursday, nearing their highest levels in seven months, as investors assessed whether talks between the United States and Iran could avert a military conflict that could disrupt supplies. However, a rise in US crude inventories limited gains. Brent crude futures were at $71.12 a barrel, up 27 cents, or 0.3%, by 01:23 GMT. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.4%, to $65.65.

According to National Iraqi News Agency, Brent rose 8 cents on Wednesday, while WTI fell 21 cents. On Monday, both benchmarks climbed to their highest levels since July 31 and have remained near those levels since Washington deployed military forces to the Middle East to pressure Iran to negotiate a halt to its nuclear and ballistic missile programs. US envoy Steve Wittkopf and Jared Kushner are scheduled to meet with an Iranian delegation for a third round of talks in Geneva on Thursday.

‘Investors are focused on the prospects of avoiding military conflict in the US-Iran negotiations,’ said Toshitaka Tazawa, an analyst at Fujitomi Securities. He added that even in the event of hostilities, West Texas Intermediate crude would likely rise temporarily above $70 a barrel before settling back to a range between $60 and $65, provided the targets are limited and the conflict is short-lived. A prolonged conflict would disrupt supplies from Iran, the third-largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC), and from other Middle Eastern oil exporters.

US President Donald Trump succinctly outlined his rationale for a possible attack on Iran in his State of the Union address on Tuesday, saying he would not allow a country he called the world’s leading sponsor of terrorism to possess a nuclear weapon. Iranian Foreign Minister Abbas Araqchi said on Tuesday that reaching an agreement with the United States was “within reach, but only if diplomacy is given priority.”