Commodity markets traded higher on August 18, with crude oil extending gains amid heightened Middle East tensions and concerns over energy supply disruptions. Gold also advanced for a third straight session as expectations of a near-term US rate hike eased.

Oil prices rose on Tuesday as a deal to end the Middle East war seemed further out of sight with Iran saying it will adopt a more offensive stance and the U.S. ruling out extending a ceasefire agreement, heightening worries about energy supply.

Outward progress towards peace talks and a resumption of oil tanker traffic through the strategic Strait of Hormuz has ground to a halt, threatening to extend the conflict that the U.S. and Israel launched with attacks on Iran on February 28.

Brent crude futures climbed 27 cents, or 0.3%, to $91.14, after rising to their highest since July 30 on Monday.

U.S. West Texas Intermediate crude futures were up 42 cents to $85.04 a barrel, after gaining more than 1% earlier in the session to $85.37, their highest since July 31.

Gold rose for a third straight session on Tuesday as fears of a U.S. interest rate hike next month eased, with investors awaiting minutes from the Federal Reserve's latest meeting for fresh clues on the monetary policy path.

Spot gold was up 0.2% at $4,424.28 per ounce, while U.S. gold futures for December delivery edged 0.2% higher to $4,480.90.

Among other precious metals, silver rose 0.3% to $65.98 an ounce. Platinum gained slightly, while palladium was flat.

The U.S. dollar held near multi-month lows against most major currencies on Tuesday as traders walked back expectations of near-term monetary tightening, although the imminent threat of an escalation in the Middle East war left sentiment fragile.