Brent crude futures rose 29 cents, or 0.3%, to $88.31 a barrel at 0805 GMT. This occured as oileases on Thursday after settling lower the previous day as fuel demand in the U.S., the world’s biggest oil user, outweighs tension in the Middle East.
According to supply report from the U.S. Energy Information Administration (EIA) on Wednesday, gasoline stockpiles fell less than forecast while distillate stockpiles rose against expectations of a decline, reflecting signs of slowing demand.
“It does not exactly give a healthy state of domestic demand in the U.S.,” said John Evans of oil broker PVM, who added that U.S. economic data out later in the day would be important for sentiment. “Oil prices today will not be in the hands of the oil market,” he said.
“The current weakness in benchmark prices, after testing above $90 levels, is due to market sentiment refocusing on global economic headwinds over geopolitical tensions,” said Emril Jamil, senior oil analyst at LSEG Oil Research.
An expansion of the Israeli Gaza war is expected as Israel may start an assault on Rafah, in the enclave’s south, which could potentially disrupt oil supplies. Though oil supply is still yet to be affected, and no reports if direct conflict between Israel and Iran, which is a major oil producer.
