Geopolitical tensions in Middle East impact oil prices

Oil prices held steady on Thursday as concerns over sluggish demand from the US, the top oil consumer, offset worries about supply disruptions in the Middle East. Brent crude oil futures inched up by 0.5% to $85.68 a barrel, while US West Texas Intermediate crude futures also rose by the same percentage to $81.32.

The US Energy Information Administration's report of a surprising 3.6 million barrel increase in the country's crude oil stocks last week, contrary to expectations of a decrease, dampened hopes of a tightening market due to seasonal demand. Additionally, US gasoline stocks surged by 2.7 million barrels, further contributing to the market concerns.

Geopolitical tensions in the Middle East, particularly the Israel-Hamas conflict in Gaza potentially spreading to Lebanon, have prevented a more significant drop in oil prices. The escalating border disputes between Israel and Lebanon's Hezbollah have raised fears of a broader regional conflict involving major oil producer Iran. Turkish President Tayyip Erdogan expressed solidarity with Lebanon, urging regional countries to show support. Meanwhile, Israeli forces intensified attacks in Gaza, with reports of intense fighting in Rafah.

The unexpected rise in US oil stockpiles and the escalating tensions in the Middle East have kept oil prices stable, despite concerns about sluggish demand and supply disruptions. The situation remains fluid, with geopolitical developments playing a crucial role in shaping the future of oil markets.