Oil prices edged higher in Asian trading on Wednesday as investors weighed mixed signals on the prospects for a U.S.-Iran peace deal, while assessing the implications of the U.S. midterm elections for the conflict.

As of 20:11 ET (01:11 GMT), Brent Oil Futures expiring in January rose 1% to $104.61 per barrel, while West Texas Intermediate (WTI) crude futures also gained 0.8% to $9683 per barrel.

Crude prices had fallen in the last two sessions, with Brent settling at $103.60 a barrel on Tuesday and U.S. WTI crude at $96.09, their lowest levels in nearly four weeks, as diplomatic efforts raised hopes of an end to the conflict.

Tehran and Washington are reviewing fresh proposals from mediators aimed at bridging their differences and preventing a return to all-out war, Bloomberg reported, citing a diplomat briefed on the matter.

Qatar has intensified its mediation efforts, with its representatives travelling to Tehran on Monday for talks with Iranian officials before returning to Doha.

However, prospects for a breakthrough remained uncertain. A senior Iranian official told Reuters that Washington’s response to the latest peace proposal was not convincing.

The diplomatic progress has been tempered by fresh military action. The U.S. carried out limited strikes on Iran’s Qeshm island on Monday, targeting surface-to-air missiles used against U.S. assets.

Investors were also monitoring the outcome of the U.S. midterm elections, which could shape President Donald Trump’s domestic political position and the administration’s approach to the conflict.

Before voting, expectations of renewed military action after the elections had helped push crude prices to a six-month high, but diplomatic signals subsequently triggered a sharp reversal.

U.S. inventory data offered some support to crude prices. The American Petroleum Institute (API) reported that U.S. crude inventories fell by 5.267 million barrels in the week ended October 30, compared with analysts’ expectations for a 2.1 million-barrel increase.

Gasoline inventories rose by 1.427 million barrels, while distillate stocks fell by 270,000 barrels, according to the API figures.

Source: Investing.com

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