Oil prices down on Thursday amid weak demand, rising hopes of end to Middle East conflict

Oil prices decreased on Thursday following data indicating weak oil demand in the US, the world's largest oil consumer, and the growing opposition to the conflict in Palestine.

International benchmark Brent crude traded at $86.77 per barrel at 11.17 a.m. local time (0817 GMT), a 0.6% fall from the closing price of $87.29 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $82.03 per barrel at the same time, a 0.8% drop from the previous session that closed at $82.69 per barrel.

Data released by the Energy Information Administration (EIA) on Wednesday suggested an increase in US commercial crude oil inventories, putting downward pressure on oil prices.

US inventories rose by around 1.1 million barrels to 2.7 million barrels, compared to the market expectation of an increase of around 1.6 million barrels.

Meanwhile, Chinese Foreign Minister Wang Yi said on Thursday that his country supports Palestine's bid for full UN membership.

"The Israeli-Palestinian conflict has caused a humanitarian disaster," the state-run Global Times quoted Wang as saying.

He called for an “immediate and unconditional” cease-fire and the swift establishment of a humanitarian aid mechanism to prevent further escalation.

The Palestinian application for full UN membership comes amid Israel's deadly offensive on the Gaza Strip, which has killed nearly 33,900 people since an Oct. 7 Hamas attack that has claimed 1,200 lives.

By taking a stance against the war in Palestine, other countries increased expectations of an end to the conflict and reduced supply risks in the Middle East.

In solidarity with Palestinians in Gaza, Yemen's Houthi group has been targeting cargo ships in the Red Sea owned or operated by Israeli companies that are transporting goods to and from Israel.

A US-led coalition has conducted intermittent airstrikes since Jan. 12 targeting Houthi sites inside Yemen in response to the attacks in the region.

The US dollar's decline against other currencies also helped to support oil prices by promoting trade with cheaper oil for other currency holders. The US dollar index fell to 105.79, a fall of 0.16%.