Oil prices rise after two days of steep losses by Investing.com

Investing.com– Oil prices rose in Asian trade on Thursday, recovering from two days of steep losses, as the focus remained on conflict in the Middle East and more stimulus in top importer China.

Gains in crude were capped by dollar strength as traders braced for key US consumer inflation data due later in the day. Data showing a stronger-than-expected rise in U.S. inventories also weighed in.

U.S. crude for December delivery was up 0.4 percent at $76.89 a barrel, while it was up 0.4 percent at $72.86 a barrel by 9 p.m. ET (01:00 GMT).

Both contracts are down about 5% over the past two sessions.

Middle East tensions persist amid cease-fire speculation

Hostilities between Israel, Hamas and Hezbollah continued, with Monday marking one year since the declaration of war.

Reports that Hezbollah was pushing for a ceasefire weighed on oil markets earlier this week, although no dialogue on the matter appeared to be taking place.

Fears of oil supply disruptions due to a larger war in the Middle East served as a major rally in oil prices over the past week after Iran launched a strike against Israel.

Traders remained on the edge of a potential escalation of the conflict, especially if Israel struck Iran’s oil facilities.

China stimulus in focus

Markets were waiting for more signals on China’s stimulus measures after a series of monetary stimulus measures in the country were largely disappointed.

Chinese officials said they would hold a news conference on Saturday to outline plans for more fiscal stimulus.

The country is the world’s largest oil importer and is struggling to sustain economic growth. Beijing has also remained largely conservative in doling out more stimulus.

Strong dollar weighs ahead of US CPI

Strength in oil markets weighed on this week as traders awaited more clues on interest rates from key inflation data due later Thursday.

The reading comes amid growing doubts that the Federal Reserve will continue to cut interest rates at a rapid pace, with traders now pricing in a 25 basis point cut as the Fed’s next move.

In the US, the focus was also on the potential impact of Hurricane Milton, which made landfall in Florida as a Category 3 storm. But the storm had largely bypassed most oil infrastructure in the Gulf of Mexico.