Oil prices settled slightly Monday as a step-up in geopolitical tensions in Middle East supported bullish bets on energy. 

At 14:30 ET, West Texas Intermediate crude futures settled $0.10 higher at $76.92 per barrel, while  Brent oil futures expiring in April fell 0.2% to $82.00 a barrel. 

Middle East Tensions ratchet up as Israel prepares ground offensive of Rafa

Israel launched airstrikes over the weekend in preparation for a ground invasion of the southern Gaza city of Rafa, stoking further worries that Israel-Hamas war --  a key point of support for oil in recent months due in part to concerns that the conflict could cause disruptions in global oil supplies -- is set to escalate further. 

Middle East tensions have continued to support oil prices offsetting a recovery in U.S. production, which increased to record highs in February after cold weather-related disruptions in production.

But U.S. fuel supplies were tightened by several refiners remaining shut for maintenance. Gasoline futures had shot up nearly 9% in the prior week, although whether the trend would persist remained in doubt, given that U.S. fuel demand was also seen weakening in cold weather. 

OPEC, IEA reports; U.S. inflation on tap this week 

The Organization of the Petroleum Exporting Countries is set to release its monthly report on Tuesday, followed by the International Energy Agency on Thursday. Ahead of the monthly reported, Saudi Arabia’s Energy Minister, Abdulaziz bin Salman Al Saud, said Monday that OPEC remains prepared to adjust output policy as needed.

At the most recent meeting, OPEC and its allies, or OPEC+, decided to keep production levels unchanged and will decide in December whether to extend voluntary oil output cuts. 

Inflation data due Tuesday will also play a role in dominating market moves as it will likely filter into the Fed's thinking on monetary policy. Headline U.S. consumer price index is expected to have slowed marginally in January.