LONDON (Reuters) -Oil prices were broadly flat on Thursday as investors waited on developments in the Middle East, the release of official U.S. oil inventory data and details on China’s stimulus plans.

futures were up 25 cents to $74.47 a barrel at 0834 GMT, while U.S. West Texas Intermediate crude futures were at $70.64 a barrel, also up 25 cents.

Both benchmarks settled down on Wednesday, closing at their lowest levels since Oct. 2 for a second day in a row, after OPEC and the International Energy Agency cut demand forecasts for 2024 and 2025.

Prices have also fallen as fears eased that a retaliatory attack by Israel on Iran for the latter’s Oct. 1 missile strike could disrupt oil supplies, though uncertainty remains over how the conflict in the Middle East will develop.

“The country’s forthcoming retaliatory measures against Iran are still not clear,” said John Evans of oil broker PVM.

He added that the Middle East “will certainly provide enough reason to move oil prices again soon enough and investors today will also be preoccupied with an abundance of financial data”.

Among that data are U.S. oil inventories. The Energy Information Administration (EIA) will release its official government data at 11 a.m. EDT (1500 GMT).

The American Petroleum Institute’s Wednesday figures showed crude and fuel stocks fell last week, market sources said, against expectations of a build-up in crude stockpiles. [EIA/S]

“Any signs of weak demand in EIA’s weekly inventory report could put further downward pressure on oil prices,” ANZ analysts said.

PVM’s Evans also cited Thursday’s U.S. jobless claims data at 8.30 a.m. EDT (1230 GMT) and a rate decision from the European Central Bank.

That decision may support oil prices if the bank goes ahead with lowering interest rates again, the first back-to-back rate cut in 13 years, as it shifts focus from cooling inflation to protecting economic growth.

Investors are also waiting for further details from Beijing on broad plans announced on Oct. 12 to revive its ailing economy, including efforts to shore up its ailing property market.

Investing.com — Bank of America analysts argued in a note Thursday that gold is emerging as a more attractive safe-haven asset than government bonds, driven by fiscal concerns and global economic dynamics.

While falling real interest rates typically boost gold prices, BofA notes that “higher rates do not necessarily put pressure on gold,” signaling a shift in how the yellow metal reacts to macroeconomic conditions.

One of the key drivers, according to BofA, is growing fiscal pressure. The U.S. national debt is expected to reach unprecedented levels in the next three years, and interest payments on this debt are likely to increase as a share of GDP.

As BofA explains, “This makes gold an attractive asset,” prompting them to reaffirm their bullish target of $3,000 per ounce.

BofA also highlights that both leading U.S. presidential candidates—Kamala Harris and Donald Trump—show little inclination toward fiscal restraint.

In fact, “policymakers strongly favor fiscal expansion” globally, the bank points out.

Future commitments, including climate initiatives, defense spending, and demographic challenges, could raise spending by as much as 7-8% of GDP annually by 2030, said the bank, citing IMF estimates.

If markets struggle to absorb the increasing debt issuance, volatility could rise, further supporting demand for gold. “Central banks in particular could further diversify their currency reserves,” BofA notes, adding that gold holdings by central banks have grown from 3% to 10% of total reserves over the past decade.

Western investors have also stepped back into the gold market in recent months. Although China’s gold imports fell during summer amid stimulus efforts, non-monetary gold demand from Western participants has increased.

However, BofA warns that short-term gains may be limited as markets factor in “a no-landing scenario for the U.S. and a slower pace of rate cuts,” which could cap gold’s near-term upside.

“There is also a risk that gold may give back some of the recent gains, although we ultimately see prices supported at $2,000/oz,” BofA concluded.

Investing.com — Bank of America (BofA) is forecasting more downside risk than upside to oil prices, with likely settling around $70 per barrel.

In a Thursday note, the bank’s commodities team shared a cautious view on oil due to several factors influencing the market, including OPEC’s supply dynamics and non-OPEC production growth.

“Our base case is $70/bbl (which we think is priced in), but we see more downside oil price risk than upside (OPEC spare capacity could easily cover most scenarios of barrels threatened by wider Middle East conflict),” strategists noted.

A key driver of this risk is the potential for OPEC to bring back an additional 2 million barrels per day to the market, on top of expected non-OPEC supply growth of 1.6 million barrels per day. BofA forecasts that global demand for oil is projected to grow by only 1 million barrels per day next year.

“Our call on OPEC is a very slow return of the ~2mbd – and this suggests ~6-7% of demand as OPEC spare capacity, according to energy data firm Woodmac,” the note continues.

“This ceded share has been higher in the past, but generally only in short, surprise demand downturns, not as a norm. To us, this suggests limited upside to our $70 Brent price and potential downside should OPEC regain share.”

In the current environment, BofA strategists said they prefer gas-linked stocks, particularly midstream companies. They note that while there is currently an oversupply of gas, the medium-term prospects are improving, with positive catalysts expected in 2025 as data center growth and liquefied (LNG) demand start to accelerate.

The team believes the market is underestimating the free cash flow (FCF) potential of their preferred companies, some of which could see payouts increase by 50% by 2027.

Cheniere Energy (NYSE:) remains BofA’s top Buy-rated pick, with the bank predicting FCF inflection towards more than $20 per share in the next three years.

Other Buy-rated energy names include Kinder Morgan (NYSE:), Williams Companies (NYSE:), and Chevron (NYSE:), among others.