New Delhi, Nov. 3 -- Oil prices fell on Tuesday after an initial surge, with Brent crude dropping as much as 3% from the day's high, as markets weighed reports of fresh US strikes on Iran against signs of a possible diplomatic resolution to the conflict.

Brent had touched an intra-day high of $106.90 per barrel before retreating. At the time of writing, the January contract of Brent on the Intercontinental Exchange was trading at $102.76 per barrel, down 1.92% from its previous close.

Prices rose earlier in the day over concerns of escalation after the US midterm elections. A report by the Wall Street Journal that the US attacked Iran's Qeshm Island on Monday and that Washington has been carrying out "limited strikes" against the countr...