Oil prices eased on Thursday on reports the US and Israel will try to restart talks on a possible ceasefire in Gaza.

Brent oil settled 58 cents, or 0.8 percent lower at $74.38 a barrel while the US West Texas Intermediate (WTI) crude slipped 58 cents, or 0.8 percent to end at $70.19.

The oil market has been gripped by concerns about the ongoing conflict in the Middle East and the possibility that it could result in oil supply disruptions.

Negotiators will gather in Doha, the capital of Qatar, in the coming days to try to restart talks toward a deal for a ceasefire and the release of hostages in Gaza.

Iran fired close to 200 missiles at Israel on October 1 and this led the international crude benchmark, Brent crude to surge about 8 percent during the week ended October 4 on worries Israel would attack Iran’s oil infrastructure.

It fell about 8 percent in the week ended October 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.

Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC), produces about 4 million barrels per day and backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. An attack by Israel will send prices up.

Analysts believe that other Middle Eastern producers Saudi Arabia and the United Arab Emirates (UAE), have enough spare capacity to offset potential losses of supply from Iran.

However, in case the conflict escalates to Iranian proxies targeting oil infrastructure in Iran’s Middle Eastern neighbours, or if Iran moves to block or restrict oil cargo traffic in the Strait of Hormuz, oil prices could spike to triple digits and record highs.

In a related development, Saudi Arabia’s oil export revenues fell to the lowest level in more than three years in August caused by underwhelming oil demand and continued supply constraints from the world’s top crude exporter.

Traders also weighed uncertainty ahead of the US presidential election on November 5 between former president Donald Trump and current Vice President Kamala Harris.

Oil prices fell on Wednesday after data showed that US crude inventories rose as traders continued to consider the conflict in the Middle East.

Brent crude oil, against which Nigerian oil is priced, shed $1.08, or 1.42 per cent to settle at $74.96 per barrel while the US West Texas Intermediate (WTI) crude oil dipped by 97 cents, or 1.35 per cent to $70.77.

The US Energy Information Administration (EIA) reported an inventory increase of 5.5 million barrels for the week to October 18.

The inventory change followed an American Petroleum Institute (API) estimate of a build totalling 1.64 million barrels for the reported period. It also compared with a draw of 2.2 million barrels for the previous week, as reported by the EIA last Thursday.

In petrol, the American authority estimated an inventory build of 900,000 barrels for the week to October 18, with production averaging 10 million barrels daily.

This compared with an inventory decline of 2.2 million barrels for the previous week when petrol production averaged 9.3 million barrels daily.

Market analysts noted that the crude inventory build is due to the recent hurricane in the US which curtailed production in the largest oil producer in the world.

Pressure also came as the US dollar index rose to its highest point in late July.

A strong US Dollar can hurt demand for oil, which is priced in the American currency, as it makes it more expensive for holders of other currencies.

The market also continued to monitor developments and concerns over potential oil supply risk from conflict in the Middle East.

On Wednesday, there was no tangible outcome from the US Secretary of State Antony Blinken’s latest visit to Israel.

Israel continues to pound both Gaza and Lebanon, and most recently it killed the next in line to the top spot at Hezbollah, Hashem Safieddine, sparking expectations of retaliation.

Mr Blinken pushed on Wednesday for a halt to fighting between Israel and militant groups Hamas and Hezbollah, but heavy air strikes carried out by Israel on a Lebanese port city Tyre showed that there is no calm in sight.

Market participants expect the conflict to go on longer and have taken advantage of the events unfolding to price longer.

Brent crude rose $1.75 or 2.4 percent to settle at $76.04 per barrel as traders ignored the possibility of a ceasefire in the tension-filled Middle East and jumped on signs that demand will improve in China, the world’s second largest economy.

Also, the US West Texas Intermediate (WTI) gained $1.53, or 2.2 percent to $72.09 a barrel.

This development means oil prices settled higher for the second consecutive session on Tuesday as traders banked on recent efforts by China to support its slowing economy.

This has led analysts to raise expectations for oil demand in the world’s largest crude importing nation.

Weak demand from China amid rapid electrification of its car fleets weighed heavily on oil prices in recent months.

Analysts at Goldman Sachs said their China demand tracker rose by about 100,000 barrels per day in the prior week to a six-month high, partly as the country’s industrial production and retail sales beat expectations.

Also, China set crude import quotas for next year at 257 million metric tons (equivalent to 5.14 million barrels per day), up from this year’s 243 million tons on Tuesday.

On the geopolitical front, the US Secretary of State, Mr Anthony Blinken met Israel’s Prime Minister, Mr Benjamin Netanyahu and pushed for a ceasefire in the Middle East after the country killed the leader of Hamas last week.

The US, which is an ally of Israel, hopes that this will provide an opportunity for peace in the region.

The US envoy’s visit marked the 12th visit but he has not been able to achieve the desired outcome so investors took this as a sign that nothing will change in the near term.

Also, Israel does not look like it will stop in Gaza and Lebanon just as Iran-back Hezbollah appears not to be relenting.

The market also overlooked the rise in crude oil inventories in the US which rose by 1.643 million barrels for the week ending October 18, according to the American Petroleum Institute (API). For the week before, the API reported a 1.58-million-barrel draw in crude inventories.

Official data from the US Energy Information Administration (EIA) is due later on Wednesday.