Oil prices were mostly steady on Thursday ahead of an OPEC+ meeting later in the day, with investors waiting to see what the producer group will do next on supply cuts while also monitoring geopolitical tensions in the Middle East.

Brent crude futures were up 5 cents, or 0.07%, at $72.36 a barrel by 0730 GMT, while U.S. crude futures were at $68.60 a barrel, up 6 cents, or 0.09%.

Both benchmarks fell nearly 2% on Wednesday. A bank sold a large number of U.S. futures contracts in afternoon trading on Wednesday, a person with direct knowledge of the matter said, pushing prices lower.

The Organization of the Petroleum Exporting Countries and its OPEC+ allies are likely to extend their latest round of oil output cuts from January by at least three months at an online meeting at 1100 GMT on Thursday, OPEC+ sources told Reuters, providing additional support for the oil market.

OPEC+ has been trying to end supply cuts until next year but has so far held off on taking action.

"Market participants are watching to see whether OPEC+ will focus on strengthening prices by extending production cuts, or opt to maintain its share of the global crude market by easing them," said Satoru Yoshida, commodities analyst at Rakuten Securities.

"The OPEC+ decision may trigger a short-term reaction, but the oil market is likely to rise by the end of the year on expectations of a U.S. economic recovery under the Trump administration and ongoing Middle East tensions," he said.

For now, the uncertainty is keeping prices from recovering.

"While the output decision from OPEC+ is still pending, there may be some risk-off as some investors are pricing in a disappointing scenario from OPEC+," said Yeap Jun Rong, market strategist at IG.

"I think it has become somewhat clear that OPEC+ is powerless, and with the potential increase in oil production from the Trump administration coming in 2025, their goal of supporting prices may be more challenging," Yeap said.

A larger-than-expected draw in U.S. crude stocks last week also lent some support to prices.

U.S. crude stocks fell more than expected last week as refiners ramped up operations, the Energy Information Administration said. Gasoline and distillate stocks rose more than expected during the week. [EIA/S]

In the Middle East, Lebanon's Hezbollah has suffered a significant military degradation by Israel, but the Iran-backed group is likely to try to rebuild its weapons and forces and pose a long-term threat to the U.S. and its regional allies, four sources briefed on the latest U.S. intelligence told Reuters.

Israel said on Tuesday it would return to war with Hezbollah if its ceasefire failed and that its attacks would deepen into Lebanon and target the country itself.

Meanwhile, Donald Trump's Middle East envoy has traveled to Qatar and Israel to kick-start the U.S. president-elect's diplomatic push to help secure a Gaza ceasefire and a hostage release deal before he takes office on Jan. 20, sources briefed on the talks told Reuters.

Source: Investing.com