Oil fund USO gains 1.03% to $168.29 even as US-Iran contacts revive hopes of a deal

USO was up 1.03% at $168.29 a share, and Tehran rejected Washington's seven-day Hormuz plan a day earlier while the military clock is still running.

Oil fell on Thursday as fresh US-Iran contacts eased fears of an attack, though the move is small and the reasons for caution are larger. Brent December futures were down 0.4% at $114.88 a barrel and WTI was 0.8% lower at $102.

The diplomacy is real enough. US envoy Tom Barrack has said a deal is 'very close'. Qatari mediators have given Iran a new draft, which Tehran is weighing and will answer by the end of the week. Al Arabiya reported that mediators and Iran are discussing a meeting in Turkey before November 4.

But Iran rejected Washington's seven-day Hormuz plan on Wednesday, calling its terms 'unacceptable demands', and Iranian state TV has said talks to reopen the strait are stalled until the US lifts its blockade. Iran's Revolutionary Guards Navy said three tankers caught fire after hitting mines within 24 hours, though US Central Command said the main transit routes are clear.

That is why this looks like a market pricing talk. Through October, each round of Iranian diplomatic language ran alongside tanker strikes, mine incidents and a confirmed hit on Iran's Konark naval base, and the risk premium held. A 0.4% dip on contacts does not break that pattern.

The military clock sits behind it. Trump has pledged no strike before the November 3 election, yet the Pentagon holds a strike directive with no date, a top admiral has briefed him on options, and Axios reported that US and Israeli officials expect a week-long bombing absent a deal. Whether the price keeps falling depends on Tehran turning openness into a concrete step on Hormuz, which earlier headlines of progress have repeatedly failed to deliver.