HOUSTON: Oil prices rose on Thursday as war in the Middle East kept stoking supply concerns, while an unexpected uptick in US crude and gasoline capped price gains.

Brent crude oil futures were up 92 cents, or 1.08%, to $86.17 a barrel by 09:46 a.m. EDT (1446 GMT). US West Texas Intermediate crude futures rose 86 cents, or 1.06%, to $81.76.

On Wednesday, both benchmarks settled slightly higher. Cross-border strains between Israel and Lebanon’s Hezbollah have been escalating, fanning fears that a widening war could draw in other countries including major oil producer Iran.

The French foreign ministry said France is extremely concerned about the situation in Lebanon and called for restraint. Any contagion could have a big impact on crude supplies from the Middle East, said Panmure Gordon analyst Ashley Kelty.

Turkish President Tayyip Erdogan said his country stood in solidarity with Lebanon and called on the region’s countries to show support. Israel stormed a neighbourhood in Gaza City, telling Palestinians as the tanks moved in that they must move south.

Israeli forces bombed the southern city of Rafah in what it called final stages of an operation against Hamas militants. The US Energy Information Administration (EIA) reported a 3.6 million barrel jump in the country’s crude oil stocks last week. Analysts polled by Reuters had expected a drawdown of 2.9 million barrels. US gasoline stocks rose by 2.7 million barrels.

Analysts had expected a 1 million barrel draw. “We are right now at the peak of the summer driving season, with gasoline and diesel demand peaking as people travel over the July 4 weekend, so for markets to be moving sideways now, then we may well even see a dip after the holiday weekend,” said Tim Snyder, economist at Matador Economics.