Oil prices increased on Tuesday, regaining some losses they had sustained the previous day. Investors were concerned that the battle between Israel and Hamas may expand into a bigger conflict in an oil-exporting region, leading to significant interruptions in oil supplies.

At 06:50 GMT, a barrel of Brent oil rose 50 cents, equivalent to a 0.5 percentage point rise. At the same time, the price of a barrel of West Texas Intermediate crude in the United States rose 46 cents, equivalent to a 0.5 percentage point gain.

“The market is up on an adjustment after a drop in the past two sessions and on nagging fears of possible supply disruptions in the Middle East,” said Yuki Takashima, economist at Nomura Securities. “The market is up on an adjustment after a drop in the past two sessions.”

Both benchmarks dropped by more than 2% on Monday as diplomatic efforts in the Middle East, the world’s largest oil-supplying area, escalated to control the conflict between Israel and Hamas. This eased investor concerns about supply interruptions, one of the primary factors driving investor anxiety.

On Monday, Hamas said it had rescued two Israeli women among the more than 200 captives captured during its rampage on October 7 in southern Israel. At the same time, reports indicated that the United States had encouraged Israel to refrain from launching a ground assault in the Gaza Strip.

Despite this, Israel kept up its bombing of Gaza on Monday, hours after it had begun conducting air raids over southern Lebanon the previous night.

“The Israel-Hamas situation remains highly fluid, and clearly, the market remains divided over whether the conflict will continue to ease from here as Hamas continues to release hostages or flares up again,” said Vandana Hari, creator of oil market intelligence company Vanda Insights. “The market remains divided over whether the conflict will continue to ease from here as Hamas continues to release hostages,”

On Monday, Israel carried out airstrikes against hundreds of targets in Gaza as Israeli forces engaged Hamas terrorists during raids into the beleaguered Palestinian territory. There has been an increase in the number of fatalities, and people are being held in appalling circumstances due to the siege.

“We expect WTI to move within the $80-$90 range for a while,” Takashima said, adding that investors were also watching data regarding U.S. inventory levels. “All eyes are on the situation in Israel and Gaza, OPEC production, and the pace of demand recovery in China,” he added.

A preliminary survey conducted by Reuters on Monday indicated that crude stocks in the United States are projected to have increased over the last week, while distillate and gasoline inventories are expected to have decreased.

The survey was carried out before the reports that were planned to be released by the American Petroleum Institute business organization on Tuesday at 2030 GMT and by the Energy Information Administration, the statistics arm of the United States Department of Energy, on Wednesday at 1430 GMT. Both of these reports were expected to be released on Tuesday.