Crude oil futures ticked down Tuesday to settle at their lowest in seven weeks, a day after losing more than 6%, following reports that Israeli Prime Minister Netanyahu will hold a meeting to discuss a possible diplomatic solution to the fighting against Hezbollah.

The Israeli PM is set to meet with ministers and the heads of the country's military and intelligence community about talks over the war in Lebanon, Axios reporter Barak Ravid said on X.

The loss of political risk premium moves the market's focus to supply and demand on expectations the oil market will shift into surplus next year, and bearish bets appear based on the likelihood that U.S. production will rise while OPEC+ starts to unwind production cuts, Phil Flynn of Price Futures Group says.

But Monday's price reaction in the oil market "may have been exaggerated," Commerzbank's Carsten Fritsch writes, as it still is not clear how Iran will react to Israel's strikes over the weekend. "It would be premature to completely rule out an escalation."

Front-month Nymex crude (CL1:COM) for December delivery closed -0.2% to $67.21/bbl, its second-lowest settlement value this year, and front-month December Brent (CO1:COM) ended -0.4% to $71.12/bbl.

U.S. natural gas futures (NG1:COM) finished mixed, as front-month November gas ended +1.6% to $2.346/MMBtu and the most-active December contract closed -0.1% to $2.859/MMBtu.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)

The upcoming U.S. election could pose a bearish risk to global natural gas markets, particularly liquefied natural gas, Goldman Sachs analysts say.

"Any significant changes to U.S. sanctions or tariff policies would potentially soften LNG and thus European and Asian gas markets at the margin," the bank writes.