SINGAPORE, April 11 (Reuters) - Oil prices ticked up

during trade on Thursday, after rising a dollar a barrel in the

prior session, as investors braced for a worsening of the Middle

East crisis, potentially involving Iran, the third-largest oil

producer in OPEC.

Brent crude futures was up 5 cents to $90.53 a

barrel at 0632 GMT, while U.S. West Texas Intermediate crude

futures gained 4 cents at $86.25 a barrel.

Both contracts rose more than 1% in the prior session after

three sons of a Hamas leader were killed in an Israeli airstrike

in Gaza, feeding worries that ceasefire talks between the two

sides might stall. Earlier this week, Israel and Hamas began a

fresh round of negotiations in their more than six-month-old

Gaza war but those discussions have yielded no agreement.

"Prices remain sensitive to geopolitical developments in the

Middle East, with market participants pricing for the risks of

supply disruptions if tensions were to drag for longer," said

Yeap Jun Rong, market strategist at IG.

"This aids to offset some risk-off sentiments overnight, as

markets recalibrate their rate expectations to price out a June

rate cut and for rates to be kept high for longer until

September," added Yeap, referring to U.S. interest rates.

Higher-for-longer rates could dampen economic growth and

suppress demand for oil.

Minutes from the U.S. Federal Reserve showed officials

worried that progress on inflation might have stalled and a

longer period of tight monetary policy would be needed to tame

inflation in the world's largest economy.

Investors who had earlier expected a rate cut in June now

see September as a likelier timing for the easing cycle to

begin, following a third straight stronger-than-forecast reading

on consumer inflation.

Yeap added that oil's upward trend may persist as the Middle

East geopolitical situation remains tricky.

The region is on alert for possible Iranian retaliation over

a suspected Israeli airstrike on Iran's embassy in Syria at the

start of the month. A Bloomberg report on Wednesday said the

U.S. and its allies believe major missile or drone strikes by

Iran or its proxies against Israel are imminent.

U.S. Secretary of State Antony Blinken has told Israeli

Defense Minister Yoav Gallant that the United States will stand

with Israel against any threats by Iran, the U.S. State

Department said later on Wednesday.

"The market has become increasingly concerned that the

Israel-Hamas war could escalate across the Middle East, putting

oil supply at risk," ANZ analyst Daniel Hynes said.

Oil traders will also be looking out for a monthly oil

market report from the Organization of the Petroleum Exporting

Countries (OPEC) due later on Thursday, and the International

Energy Agency's oil market report due on Friday.