Oil prices edged down on Tuesday, after a 6% tumble in the previous session, on a report that Israeli Prime Minister Benjamin Netanyahu will hold a meeting for a diplomatic solution to the war in Lebanon.

Brent crude futures eased 31 cents, or 0.4%, to $71.11 a barrel by 11:23 a.m. ET (1523 GMT), while U.S. West Texas Intermediate crude was down 32 cents, or 0.5%, at $67.36 a barrel.

Both benchmarks had gained more than $1 earlier in the session. On Monday, both contracts fell to their lowest since Oct. 1 after Israel's retaliatory strike on Iran at the weekend bypassed Tehran's oil infrastructure.

Netanyahu will hold a meeting on Tuesday evening with several ministers and the heads of the military and intelligence community about the talks on a diplomatic solution to the war in Lebanon, Axios reporter Barak Ravid said on X, citing two sources.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei said on Monday that Iran will "use all available tools" to respond to Israel's weekend attack.

Meanwhile, declining oil demand from China, the world's largest crude oil importer, has been a drag on global oil consumption and prices.

Demand will return to normal growth rates after Chinese President Xi Jinping introduces new stimulus measures to the economy, BP CEO Murray Auchincloss told Reuters.

The oil market is currently balanced and demand is expected to average 104.5 million barrels per day this year, the CEO of Saudi Arabian oil giant Saudi Aramco said.

"Markets tried to stage a modest recovery but continue to be under pressure from lacklustre demand from China and worries about increasing supply," Andrew Lipow, president of Lipow Oil Associates.

Investors also awaited weekly U.S. oil inventory data for direction. Industry data from the American Petroleum Institute is due at 4:30 p.m. EDT (2030 GMT), followed by government data on Wednesday morning. [EIA/S]

Crude oil and gasoline stockpiles in the U.S. likely rose last week, while distillate inventories were seen down, a preliminary Reuters poll showed on Monday.