Oil prices were little changed on Thursday as fuel demand in the United States, the world's biggest oil consumer, fell amid signs of a slowing economy and concerns about a wider conflict in the Middle East.
By 0420 GMT, Brent crude futures were up nine cents at $88.11 a barrel, after falling 0.5 percent in the previous session.
U.S. West Texas Intermediate crude futures for June delivery rose 7 cents to $82.88 a barrel, after falling 0.6 on Wednesday.
U.S. Energy Information Administration data showed on Wednesday that gasoline demand in the week ending April 19 fell 2.8 percent from the previous week and 11 percent from a year ago.
This comes amid signs that U.S. business activity slowed in April. Stronger-than-expected inflation and employment data suggest the Federal Reserve will likely delay an expected interest rate cut, weighing on economic sentiment.
The current decline in the prices of the two benchmark crudes, after exceeding the $90 level per barrel, is due to the refocusing of market sentiment on global economic headwinds due to geopolitical tensions, according to Reuters, according to Emeril Jamil, senior oil analyst at Oil Research at the London Stock Exchange Group.
Jamil explained that regardless of geopolitical factors, prices in this quarter will be driven by factors including supply cuts by major producers, economic data from China and the Eurozone, as well as rising demand expectations as the Northern Hemisphere summer approaches amid expectations of lower supply.
US GDP and personal consumption expenditure data for March on Thursday and Friday will provide clearer indications of the Federal Reserve's interest rate policy.
The fighting in Gaza is expected to expand as Israel may launch a ground invasion of Rafah in the south of the Strip, which could increase the chances of a wider war that could disrupt oil supplies in the Middle East, according to a Reuters report.
However, there have been no further signs of direct conflict between Israel and Iran, a major oil producer, since last week.
Tensions between Iran and Israel have eased, but Israeli attacks on Gaza are expected to intensify, and the risk of the conflict spreading to neighboring countries is boosting oil prices, said Toshitaka Tazawa, an analyst at Fujitomi Securities Co., Ltd.
Other data from the Energy Information Administration showed that U.S. oil inventories fell unexpectedly last week as exports jumped, while gasoline stocks fell less than expected.
The Energy Information Administration said crude inventories fell by 6.4 million barrels to 453.6 million barrels, compared with expectations in a Reuters poll for an increase of 825,000 barrels.
