SINGAPORE, July 14 Reuters Oil prices were little changed on Thursday as investors weighed tight supplies against the prospect of a large U.S. rate hike that would stem inflation and curb crude demand.

Brent crude futures for September edged up 5 cents to 99.62 a barrel by 0620 GMT after settling below 100 for the second straight session on Wednesday.

U.S. West Texas Intermediate crude for August delivery was at 96.23 a barrel, down 7 cents after rising 46 cents in the previous session.

Oil prices have tumbled in the past two weeks on recession concerns despite a drop in crude and refined products exports from Russia amid Western sanctions and supply disruption in Libya.

It is all sentiment driven at the moment and that has caused most of the losses seen in oil markets over the last few weeks, said Howie Lee, an economist at Singapore39;s OCBC bank.

I don39;t see any significant changes in oil supply fundamentals and that is probably why we still see Brent holding around the 100 level.

The U.S. Federal Reserve is seen ramping up its battle with 40year high inflation with a supersized 100 basis points rate hike this month after a grim inflation report showed price pressures accelerating. 

The Fed rate hike is expected to follow a similar surprise move by the Bank of Canada on Wednesday.

Investors also flocked to the dollar, often seen as a safe haven asset. The dollar index hit a 20year high on Wednesday, which makes oil purchases more expensive for nonU.S….