Ammon News - Oil prices inched higher on Wednesday amid uncertainty over what may happen next in the Middle East conflict, after demand concerns knocked the market to its lowest since early October in the previous session.

Brent crude oil futures rose 19 cents, or 0.3%, to $74.44 a barrel by 0630 GMT. U.S. West Texas Intermediate crude futures climbed 24 cents, or 0.3%, to $70.82 per barrel.

Oil prices tumbled more than 4% to a near two-week low on Tuesday due to a weaker demand outlook and after a media report said Israel would not strike Iranian nuclear and oil sites, easing fears of a supply disruption.

However, concerns about an escalation in the conflict between Israel and Iran-backed militant group Hezbollah persist, with the U.S. on Tuesday saying it opposed the scope of Israel's air strikes in Beirut over the past few weeks.

"Following the recent retracement in prices, we may expect some room for prices to stabilise in the near term, as market participants reassess further developments on the geopolitical front," said Yeap Jun Rong, market strategist at IG.

"More clarity over China's fiscal policy awaits as well, and the lack of specifics seems to cast some uncertainties over the eventual impact on its oil demand outlook," said Yeap.

Reuters