Oil prices hold steady as Middle East tensions keep markets on edge

Oil prices were largely unchanged in early Asian trading on Thursday, as investors balanced ongoing Middle East tensions against fresh signals from the US inventory data.

Brent crude futures for October delivery inched up 25 cents, or 0.3%, to $91.87 a barrel. US West Texas Intermediate (WTI) crude for September slipped 2 cents to $85.81, while the more actively traded October contract added 14 cents to $84.53.

Both benchmarks had risen for a fourth consecutive session on Wednesday, closing at their highest levels since July 24. The September WTI contract is set to expire later in the day.

Market strategists said prices were being supported by sporadic attacks in the region, but lacked fresh momentum in the absence of a major escalation. Uncertainty over peace talks and strained relations between the UAE, Oman, and Iran were also seen as factors underpinning a gradual upward trend.

The UAE's decision to suspend all financial and economic transactions with Iran has drawn renewed attention to the fraught ties between the Gulf Arab producer and Tehran.

On Tuesday, US President Donald Trump said no talks were underway with Iran and that the Strait of Hormuz remained open. Iran, however, maintained that the waterway was shut. Shipping data on Wednesday showed traffic through the strait had slowed, as most shipowners avoided the key route due to unclear signals on its reopening.

In the US, crude and gasoline inventories rose last week, while distillate stockpiles fell, according to the Energy Information Administration. Crude inventories increased by 4.4 million barrels in the week ended August 14, against expectations of a 600,000-barrel draw.