ECB Decision Looms as Oil Prices Hover Above $100

European stocks continued to navigate uncertain terrain on Thursday, as investors awaited the European Central Bank's decision on interest rates. The pan-European STOXX 600 index remained flat at 639.79 points, despite a 1.4% decline on Wednesday due to rising oil prices.

The ECB is expected to raise its main refinancing rate by 25 basis points to 2.5%, signaling a readiness to tighten further if inflation expectations do not improve. Financial markets are pricing in one more rate hike this year, followed by another or two next year.

Oil prices eased slightly on Thursday but remained above $100 a barrel, as traders anticipated deeper supply disruptions due to the ongoing conflict between Iran and the United States. The European Energy sector saw shares gain 0.3% in response.