Oil prices fell as the impact of Saudi Arabia increasing crude supply through a key pipeline outweighed market concerns over the US-Iran standoff.

Copper prices edged higher after workers at a major Chilean copper mine voted to strike following the collapse of negotiations, sparking supply-side worries.

Gold rebounded as traders searched for clues about the Federal Reserve's interest rate path.

Crude Oil: Prices Slide as Saudi Arabia Boosts Key Pipeline Supply

Oil prices declined, with the effect of Saudi Arabia raising crude supply through a key pipeline overshadowing worries about the US-Iran stalemate. Brent fell, settling below $103 a barrel.

After a prior drone attack, Saudi Arabia's East-West oil pipeline is said to have restored about half of its transport capacity. Despite persistent shipping risks, crude appears to be flowing steadily out of the Persian Gulf through the Strait of Hormuz via vessels using covert navigation methods.

The Trump administration is releasing up to 40 million barrels of oil from the national emergency petroleum reserve, adding further pressure on prices. Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, said: "Increased oil flows through the Strait of Hormuz, combined with the restart of Saudi Arabia's East-West pipeline, are bringing some supply relief to the market."

Although November-delivery Brent remained above $100 a barrel, that contract expires on Wednesday, while the more actively traded December futures settled at about $96. As the conflict enters its eighth month, talks between the US and Iran in New York last week made little progress. A Qatari foreign ministry spokesperson said on Tuesday that Qatar is holding talks with the US and Iran and exchanging views on possible solutions.

Despite supply disruptions caused by the Iran war, Persian Gulf oil producers have been seeking ways to keep the market supplied. Oman plans to more than double the oil storage capacity at a port outside the Strait of Hormuz, leveraging its strategic location.

November-delivery WTI fell 3.5% to settle at $89.38 a barrel; November-delivery Brent dropped 2.6% to settle at $102.59 a barrel; the more active December contract fell 1.7% to settle at $96.16 a barrel.

Base Metals

Copper prices edged higher after workers at a major Chilean copper mine voted to strike following the collapse of negotiations, sparking supply-side concerns. LME copper futures traded near the record high set earlier this month and were on track for a third straight monthly gain.

Other signs of tight copper market supply include copper concentrate treatment charges falling further into negative territory, squeezing smelter profits.

At the close, LME copper rose 0.2% to $14,438.5 a ton; LME aluminum fell 1.2% to $3,214 a ton; LME nickel dropped 1.4% to $15,958 a ton; LME zinc rose 0.5% to $3,870 a ton; LME tin gained 0.8% to $54,198 a ton; LME lead slipped 0.2% to $1,898 a ton.

Precious Metals

Gold recovered part of Monday's sharp losses as traders looked for clues on whether the Federal Reserve will continue tightening policy to curb inflation. Oil prices fell on Tuesday but remained elevated. As the market worries that persistently high energy prices could intensify inflationary pressure and prompt the Fed to raise rates further, long-term US Treasury yields kept climbing.

Ryan McKay, a senior commodities strategist at TD Securities, said trend-following commodity trading advisors (CTAs) are increasingly turning to selling precious metals such as gold, or becoming more inclined to sell. McKay sees the recent downside trigger for gold at $4,053.70 an ounce.

As of 5 p.m. Eastern Time, spot gold rose 1.6% to $4,182.31 an ounce; spot silver gained 1.4% to $61.4766 an ounce.