08:55 AM EDT, 08/01/2024 (MT Newswires) -- Oil prices rose for a second-straight session early on Thursday on rising Middle East tensions following the assassination of a leader of the Hamas militant group in Tehran a day earlier raised fears of a war spreading to the Persian Gulf.

West Texas Intermediate crude for September delivery was last seen up US$0.44 to US$78.35 per barrel, while October Brent crude, the global benchmark, was up US$0.49 to US$81.33.

Iran's supreme leader, Ayatollah Ali Khamenei, is vowing to take revenge for the Wednesday killing of Ismail Haniyeh, head of the political wing of Hamas, from an airstrike in Tehran. While Iran and Hamas have both blamed Israel, which is at war with the Iran-backed militant group, Israel has so far offered no comment.

The threat of war in the key oil-producing Persian Gulf region on Wednesday pushed prices up 4.3% from a near two-month low, with buying continuing on Thursday.

"If the reported bombing of the Hamas leader's house does prove to be the work of Israel, it will be responsible for daily back-to-back bombings in two capitals, the first being of the killing of a Hezbollah leader in Beirut. This then is the main reason oil prices pick their skirts up having endured some very negative sessions of late, due mainly to the poor showing of China data," PVM Oil Associates wrote.

Weak demand from China, the No.1 importer, is keeping oil prices in check, as the country's economy continues to sputter while the ruling Communist Party offers limited stimulus measures.

"After an easy 1Q'23 comp, Chinese oil fundamentals have continued to show outsized weakness that most believed would have eased by the end of 1H'24. While stimulus hopes have brought some relative optimism for

a rebound in the offing, near-term oil fundamentals continue to look bleak," RBC Capital Markets noted.