NEW YORK, June 28 (Reuters) - Oil prices rose in early

Asian trading hours on Friday, setting up a third straight

weekly jump, as concerns about supply problems from escalating

geopolitical tensions and weather-related disruptions offset

signs of weak demand.

Brent crude futures for August settlement, which expire on

Friday, rose 15 cents, or 0.2% to $86.54 a barrel by 0020 GMT.

The Brent contract for September was also up 0.2% at $85.44 a

barrel.

U.S. West Texas Intermediate crude futures for August

delivery rose 24 cents, or 0.3%, to $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.