Investing.com-- Oil prices rose in early Asian trade on Tuesday, recovering some ground after easing concerns over a worsening conflict in the Middle East sparked deep losses in the prior session.

Brent oil futures expiring in December rose 0.7% to $71.94 a barrel, while West Texas Intermediate crude futures rose 0.7% to $67.87 a barrel by 20:17 ET (00:17 GMT). 

Both contracts slid more than 6% on Monday after an Israeli strike against Iran over the weekend mostly avoided Tehran’s oil and nuclear infrastructure. 

The strike quashed fears of a dire escalation in the Middle East conflict, given that traders feared that any attacks on Iran’s energy infrastructure would draw a severe response from Tehran. 

This saw traders rapidly price down a risk premium from oil prices. 

Middle East tensions remain in focus as Iran touts retaliation

Fears of supply disruptions in the Middle East, due to a worsening conflict, had been a major driver of oil prices over the past month, especially after Iran attacked Israel at the beginning of October. 

Israel’s weekend strike was in retaliation for the early-October attack.

Tehran was seen downplaying the impact of the strike, but still threatened retaliation against Israel over the attack, keeping some elements of Middle East risks still in play.

Israel also showed little intent in scaling back its offensive against Hamas and Hezbollah, keeping hopes of a potential Middle East ceasefire limited. 

Oil markets brace for US elections, econ. data deluge 

Sentiment towards oil was also on edge before the U.S. presidential elections, which are less than a week away. The dollar surged in the run-up to the elections, pressuring oil markets as traders braced for a tight race between Donald Trump and Kamala Harris.

Recent polls and prediction markets showed Trump gaining some ground over Harris, with a Trump victory likely to herald inflationary policies in the coming months. 

A change in U.S. administration also heralds a shift in the country’s policies towards the Middle East. 

Before the election, focus is also on a slew of economic readings from major economies this week, which are expected to offer more cues on demand.

Purchasing managers index data from top oil importer China is due on Thursday, followed by gross domestic product data from the U.S. for the third quarter.

PCE price index data- the Federal Reserve’s preferred inflation gauge- is due on Friday, as is nonfarm payrolls data for October.