LONDON, Aug 8 (Reuters): Oil prices held steady on Thursday after two sessions of gains, with growing supply risks in the Middle East offsetting demand concerns that had pushed prices to their lowest since early 2024 at the start of the week.
Brent crude futures fell 4 cents to $78.29 a barrel by 1309 GMT. US West Texas Intermediate crude dipped 10 cents, or 0.1 per cent, to $75.33.
Brent had gained on Wednesday, recovering from a sharp drop on Monday, when Brent settled at its lowest since early January and WTI early February.
Prices were supported on Wednesday by a 3.7 million barrel drop in US crude inventories, far exceeding analyst expectations of a draw of 700,000 barrels and marking a sixth straight weekly decline to six-month lows.
"Crude oil futures experienced volatility in reaction to a mix of economic concerns and rising geopolitical tensions. Weak US economic data, including poor job growth, have raised concerns about a possible recession in the U.S," said Mazen Salhab, market strategist for BDSwiss.
"Despite these economic fears, oil prices might find support on the back of tensions in the Middle East."
The killing of senior members of militant groups Hamas and Hezbollah last week raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region.
Also lending some support, Libya's National Oil Corporation declared force majeure at its Sharara oilfield from Tuesday, a statement said, adding that the company had gradually reduced the field's production because of protests.
Analysts at Citi said there was a possibility of a bounce in prices to the low to mid-$80s for Brent.
"Upside risks in the market remain, from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season and light managed money positioning," Citi said.
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