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Oil prices experienced a modest rise on Thursday, driven by optimism surrounding potential U.S. interest rate cuts that could stimulate economic activity and boost fuel consumption. Despite these gains, concerns over slower global demand kept the upward movement in check.

Brent crude futures saw an increase of 17 cents, or 0.21%, bringing the price to $79.93 per barrel. This rise helped recover some of the losses incurred the previous day. Similarly, U.S. West Texas Intermediate (WTI) crude futures rose by 21 cents, or 0.27%, to $77.19 per barrel.

The recovery in oil prices followed a more than 1% drop on Wednesday. This decline was prompted by an unexpected rise in U.S. crude inventories, which added to existing worries about an oversupply in the market. Additionally, geopolitical tensions, particularly concerning Israel's actions in Gaza, have also contributed to market volatility. The ongoing conflict and the allegations of war crimes have not only created humanitarian concerns but also added an element of uncertainty to the oil market.

The potential for U.S. interest rate cuts has generated optimism among investors, with the expectation that such a move would invigorate economic activities and, consequently, increase fuel demand. This hope for economic stimulation has provided some support to oil prices.

However, the broader context of global economic health continues to weigh heavily on the market. Concerns about a slowdown in global demand, fueled by economic uncertainties in major economies, persist. These factors are contributing to a cautious outlook among traders and analysts.