Oil prices rebound from 2-mth low as M.east risks persist

Oil prices rose in Asian trade on Wednesday, recovering from a two-month low as markets remained focused on any signs of de-escalation in the U.S.-Iran war.

Oil also rebounded past increasing concerns over higher U.S. interest rates, after consumer inflation data read higher than expected for October.

Brent oil futures for January rose nearly 1% to $92.37 a barrel by 22:22 ET (03:22 GMT), while West Texas Intermediate crude futures rose 0.6% to $86.53 a barrel.

Oil had slumped to a two-month low on Tuesday, extending losses amid growing conviction that a Democrat-led U.S. Congress will pressure Washington into ending the conflict with Iran.

U.S. President Donald Trump also signaled restraint on Iran this week, downplaying the need for more military strikes against the country.

An effort to impeach Defense Secretary Pete Hegseth, over his handling of the Iran war, largely fell through on Tuesday evening, with House of Representatives Republicans voting down the proposal.

Iran also said earlier this week that there were no ongoing peace talks, even as Trump met with Qatari officials to discuss more mediation.

Three tankers were seen catching fire in the Strait of Hormuz over the weekend. Adding to tensions in the Middle East, Saudi Arabia and Yemen’s Iran-backed Houthis remained engaged in fighting this week, with the Houthis targeting a key Saudi pipeline.

But other data showed oil and gas transits through Hormuz reached their highest level since the conflict began in February. Separately, a Reuters survey also showed OPEC production increasing despite disruptions in the Middle East.

Strong dollar limits crude upside as rate hike bets grow

Overnight strength in the dollar, following stronger-than-expected U.S. inflation data, limited bigger gains in crude as markets prepared for higher U.S. interest rates.

The dollar index jumped nearly 0.6% overnight after consumer price index inflation data for October read stronger than expected.

The print, which was also accompanied by hawkish commentary from Fed officials, saw markets sharply increase bets on a 25 basis point hike by the Fed in December.

Markets eliminated all bets on a December hold, and were also seen pricing in a small chance for a 50 bps hike, CME Fedwatch showed.