Oil prices were little changed on Tuesday for a second straight day as uncertainty about the pace of potential U.S. interest rate cuts and the impact on fuel demand offset worries about Middle East tensions that could disrupt supply.

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Brent futures edged 1 cent lower $81.99 a barrel. U.S. West Texas Intermediate (WTI) crude rose 1 cent to $76.93 a barrel.

Oil prices were near flat in Monday's trade as well, after gaining 6 per cent last week.

The conflict in the Middle East has kept prices elevated.

On Monday, Israel freed two Israeli-Argentine hostages held by Hamas in Rafah in a ferocious rescue operation that killed 74 Palestinians in the southern Gaza city where about one million civilians have sought refuge from months of bombardments.

But limiting gains were worries about interest rates.

The New York Fed said its January Survey of Consumer Expectations showed the outlook for inflation a year and five years from now were unchanged, with both remaining above the Fed's 2 per cent target rate.

If inflation worries delay Fed interest rate cuts, that could reduce oil demand by slowing economic growth.

U.S. inflation data is expected on Tuesday, while British inflation and euro zone Gross Domestic Product (GDP) data should land on Wednesday.

Market participants awaited industry data later on Tuesday on U.S. crude inventories. Four analysts polled by Reuters estimated on average that crude inventories rose by about 2.6 million barrels in the week to Feb. 9.