Brent crude futures for August settlement, which expire on Friday, rose 15 cents, or 0.2% to USD 86.54 a barrel by 0020 GMT. The Brent contract for September was also up 0.2% at USD 85.44 a barrel.
U.S. West Texas Intermediate crude futures for August delivery rose 24 cents, or 0.3%, to USD 81.98 a barrel.
Oil prices have shrugged off signs of weak demand in the United States, the biggest oil consuming nation, and rallied higher as cross-border strains between Israel and Lebanon's Hezbollah escalated. A widening war in the Middle East could draw in countries like Iran, one of the top oil exporters in the region.
The French foreign ministry expressed concern over the situation in Lebanon on Thursday, while Turkey earlier said it stands in solidarity with Lebanon and called on regional governments' support.
Oil supplies have also come under pressure from weather-related disruptions which could worsen in the coming weeks. Heavy rains have caused Ecuador's production to decline by 100,000 barrels a day over the past week, FGE Energy said on Friday.
The U.S. Gulf Coast, home to a bulk of the country's energy and export infrastructure, could also be hit by adverse weather in the coming days with the U.S. National Hurricane Center tracking at least one weather system that could become a cyclone and headed towards the region.
Brent and WTI futures have gained 1.5% so far on a weekly basis.
On the demand front, rising U.S. crude stockpiles and weak gasoline consumption has kept a ceiling above oil prices. Government data this week showed an unexpected jump in crude inventories in the country as fuel demand weakened.
However, expectations of record travel over the July 4th weekend in the U.S. could lift gasoline demand and help draw stockpiles.
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