Oil prices held steady on Thursday after falling sharply the previous session, as concerns about shipping disruptions along the Red Sea route eased despite rising Middle Eastern tensions.
Brent crude futures were up 10 cents, or 0.1%, to $79.75 per barrel as of 0424 GMT, while WTI crude futures were down 5 cents to $74.06 per barrel. Prices fell nearly 2% on Wednesday as significant shipping companies began to return to the Red Sea.
"Concerns about shipping in the Red Sea have eased, but continued worries about tensions in the Middle East, especially on Iran's involvement in the region, make it difficult to sell further," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
"The market is likely to try the upside again... maybe in the early new year, also on expectations of a recovery in fuel demand thanks to monetary easing in the United States and higher kerosene demand during the winter in the northern hemisphere," he said.
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Maersk, a Danish shipping company, said it had scheduled several dozen container ships to travel through the Suez Canal and the Red Sea in the coming weeks after temporarily closing those routes this month due to attacks by Yemen's Iran-backed Houthi militia.
However, the prospect of a prolonged Israeli military campaign in Gaza, as well as the conflict's spillover into attacks on ships in the Red Sea, remain significant drivers of market sentiment.
On Wednesday, Israeli forces bombarded central Gaza by land, sea, and air, a day after Israel's chief of staff, Herzi Halevi, told reporters that the war would last "for many months."
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The United States government's data on fuel stockpiles is due on Thursday, a day later than usual due to the Christmas holiday on Monday.
On Wednesday, the American Petroleum Institute industry group reported that crude stocks rose 1.84 million barrels in the week ended Dec. 22, compared to a 2.7 million barrel drop predicted by seven analysts polled by Reuters.
