Brent North Sea crude for delivery in March climbed 35 cents to $110.03 a barrel in London midday trading.

New York's main contract, light sweet crude for February gained 26 cents to $94.50 per barrel.

"The latest news of the attacks put a geopolitical risk premium into pricing," said Victor Shum, an analyst at research group IHS Purvin and Gertz.

Algerian troops on Thursday besieged Islamists holding dozens of foreigners at a desert gas field, ignoring the gunmen's demand to pull back for negotiations to begin over France's military intervention in Mali.

Wednesday's brazen attack dragged Algiers and several top Western powers with citizens among the hostages into the conflict, stealing momentum from French and government troops battling their way into Mali's Islamist-held north.

The gas field, located close to the Libyan border, is jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach.

Prices were being supported also by indications of improving US crude demand. A report by the US Energy Administration on Wednesday said American oil stockpiles dropped by one million barrels in the week to January 11.

Analysts had forecast a build of 2.1 million barrels.