Oil prices rose slightly in early trading on Wednesday due to uncertainty about what could happen next in the Middle East conflict, after concerns over demand caused the market to fall to its lowest level since early October during the previous session.

Around 02:50 GMT, Brent crude oil futures rose by 14 cents, or 0.2%, to $74.39 per barrel. U.S. West Texas Intermediate crude futures rose 19 cents, or 0.3%, to $70.77

Oil prices fell by more than 4% on Tuesday, to their lowest level in nearly two weeks, due to weaker demand prospects and after a media report said that Israel would not hit Iranian nuclear and oil sites, allaying fears of a supply outage.

However, concerns about an escalation of the conflict between Israel and the Iran-backed Hezbollah militant group Hezbollah persist, with the United States saying on Tuesday that it opposed the scale of Israeli airstrikes in Beirut over the past few weeks.

“Following the recent price retracement, we can expect some margin for price stabilization in the short term, as market participants reassess future developments on the geopolitical front,” said Yeap Jun Rong, market strategist at IG.

“We are also waiting for more clarity on China's fiscal policy, and the lack of details seems to throw some uncertainty over the possible impact on the outlook for its oil demand,” Yeap said.

On the oil demand side, the Organization of Petroleum Exporting Countries and the International Energy Agency both cut their forecasts for global oil demand growth in 2024 this week, with China responsible for most of these downward revisions.

For now, the market will be paying attention to the latest US oil inventory data, with the American Petroleum Institute's weekly report due later on Wednesday and data from the Energy Information Administration due out later on Wednesday and data from the Energy Information Administration coming out on Thursday.