Oil prices edged up today as uncertainty over fighting in the Middle East kept markets on edge, but gains were capped by concerns that continued high interest rates may weigh on energy demand.
Brent futures were up 46 cents to $82.46 a barrel at 1403 GMT. US West Texas Intermediate (WTI) crude was up 52 cents at $77.44 a barrel.
Oil prices were near flat in Monday's trade, after gaining 6% last week.
The conflict in the Middle East has kept prices elevated. US, Egyptian, Israeli and Qatari officials were expected to meet in Cairo on Tuesday to seek a truce in Gaza as more than a million civilians crammed into a southern corner of the Palestinian enclave, waiting in fear for an Israeli assault.
"Oil prices have been numbed into submission by what has transpired, or not, in the Middle East," said John Evans of oil broker PVM in a note on Tuesday.
One "untoward act, missile or sudden peace agreement and crude prices will move $10/barrel".
Yemen's Iran-aligned Houthis have kept up their attacks in the Red Sea, claiming solidarity with Palestinians and striking vessels with commercial ties to the US, Britain and Israel.
But changing expectations over the path of US interest rates have limited price gains, with recent central banker comments dashing market speculation of rate cuts early this year.
U.S. consumer prices increased more than expected in January amid rises in the costs of shelter and healthcare, data on Tuesday showed, but the pick-up in inflation likely does not change expectations that the Federal Reserve will start cutting interest rates in the first half of this year.
If inflation worries delay Fed rate cuts, that could dampen economic growth and hit oil demand.
British inflation and euro zone gross domestic product data should land on Wednesday. Germany, the powerhouse of Europe's economy, is not in recession and is expected to grow in 2024, Chancellor Olaf Scholz's chief of staff, Wolfgang Schmidt, said on Tuesday.
US crude inventories figures are also due later on Tuesday, with analysts estimating they rose an average of about 2.6 million barrels in the week to 9 February.
OPEC on Tuesday stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025 and raised its economic growth forecasts for both years, saying there was further upside potential.
OPEC and allies including Russia, known as OPEC+, will make their next major decision in March, when decidingwhether to extend voluntary oil production cuts.
"Our balance sheet suggests that the market will be in surplus in the second quarter of 2024 if the group fails to roll over part of these cuts," ING analysts said in a Tuesday note.
