WTI oil for July delivery closed down US$0.46 to settle at US$61.57 per barrel, while July Brent oil was last seen down US$0.53 to US$64.85.

Israel is prepared to strike at Iran's nuclear infrastructure, CNN reported on Tuesday, citing U.S. intelligence officials. The report noted the officials did not know whether Israel has made a final decision to go ahead with an attack, which could disrupt oil supplies from the country and further unsettle the Persian Gulf region.

The report also comes as Iran and the United States are in talks to curb Iran's program to develop nuclear weapons, however talks have stalled as the Gulf country balks at American demands that it completely give up enriching uranium.

"A military confrontation involving Iran would almost certainly derail the nuclear talks and raise concerns about oil supply from the Persian Gulf, a region that accounts for roughly one-third of global crude shipments," Ole Hansen, head of commodity strategy at Saxo Bank, wrote.

Rising geopolitical risk is being countered by rising inventories amid higher supply, as OPEC+ readies to add a second tranche of 411,000 barrels per day of new production on June 1 as it reverses 2.2-million bpd of supply cuts. Production outside of the cartel is also on the rise.

In its weekly report the Energy Information Administration said U.S. commercial oil inventories rose by 1.3-million barrels last week, while gasoline and distillate inventories also rose.

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