Oil prices steadied today after the previous session's sharp losses on the back of swelling US crude stocks and easing fears of an escalation in conflict between the United States and Iran. 

Prices were hovering around where they stood before the January 3 US drone strike.

The attack killed a top Iranian general and prompted an Iranian rocket attack on Iraqi airbases hosting US forces, sending crude to its highest in four months. 

Brent crude futures moved up and down in early European trading after a 4.1% fall yesterday. 

They were down a cent at $65.43 a barrel in later trade while West Texas Intermediate was up two cents at $59.63 after sliding nearly 5% the previous day. 

US President Donald Trump had eased tensions by stepping back from further military action, depressing oil prices and diverting attention back to a surprise build in US crude stockpiles last week. 

Crude oil stocks were up 1.2 million barrels in the week ended January 3 at 431.1 million barrels, the Energy Information Administration said yesterday. 

Analysts in a Reuters poll had expected a drop of 3.6 million barrels. 

JPMorgan analysts maintained their forecast for Brent to average $64.50 a barrel this year. 

Top oil producers led by Saudi Arabia have agreed to reduce output by as much as 2.1 million barrels per day (bpd) during the first quarter of 2020. 

Meanwhile, oil and gas ship owners are bracing to pay a price for US-Iranian tensions in the form of higher insurance bills.

This could add hundreds of thousands of dollars to shipping costs that would ultimately be passed on to fuel buyers, mostly in Asia.