Oil prices fall amid sluggish demand in the US

Oil prices have shown a limited decline with a demand drop in the US, although global geopolitical tension put upward pressure on prices.

International benchmark Brent crude traded at $89.20 per barrel at 10.49 p.m. local time (0749GMT), a 0.17 percent drop from the closing price of $89.35 per barrel in the previous trading session. At the same time, US benchmark West Texas Intermediate (WTI) was trading at $85.23 per barrel, down 0.23 percent from the previous session's close of $85.43 per barrel.

The US is signalling a decline in demand, with data indicating an increase in crude stocks in the largest oil-consuming country in the world.

US commercial crude oil inventories rose by 3.2 million barrels last week against the market expectation of a decrease of around 300,000 barrels, according to data released by the Energy Information Administration (EIA) on Wednesday.

A fall in gasoline stocks in the country by approximately 4.3 million barrels to 227.8 million barrels, however, raised hopes of a demand recovery, limiting price falls.

Uncertainty over the timing of the US Federal Reserve’s interest rate cuts combined with Fed Chairman Jerome Powell's "wait-and-see" messages continue to influence prices.

Incoming data to guide decisions

Following a Fed meeting in which the bank kept its monetary policy unchanged, Powell said that a tight monetary policy continues to put pressure on demand, especially in interest-sensitive spending categories.

Based on the higher-than-expected results from the latest data on both employment and inflation, Powell noted that inflation data in January and February remained above the low values seen in the second half of last year.

"Given the strength of the economy and the progress made in inflation so far, we have time to allow incoming data to guide our policy decisions," Powell said.

Meanwhile, oil prices tested five-month highs amid ongoing geopolitical tensions and worries over global supply disruptions.

Israel continues its assault on besieged Gaza despite calls for a ceasefire. In response, Yemen's Houthi group has been targeting cargo ships going to and from Israel in the Red Sea, one of the world's most frequently used sea routes for oil and fuel shipments.