<p>London: Oil prices hit seven-week highs on Wednesday as summer demand optimism and concerns over escalating conflicts offset an industry report that said U.S. crude inventories unexpectedly rose.</p><p>Brent crude futures gained 0.3%, at $85.56 a barrel by 1525 GMT, while US West Texas Intermediate crude was up by 0.2%, at $81.75 per barrel.</p><p>"The current snapshot presents an underwhelming picture but there are green shoots that indicate a more optimistic outlook," said Tamas Varga of oil broker PVM.</p>.Oil up on firming demand, Mideast tensions underpin risk premium.<p>The Brent price being $8 over the lows hit in early June "shows genuine optimism that the global oil balance will eventually tighten," Varga added.</p><p>Both benchmarks, having recovered strongly in the last two weeks, gained more than $1 in the previous session to seven-week peaks after a Ukrainian drone strike led to an oil terminal fire at a major Russian port.</p><p>In the Middle East, Israeli Foreign Minister Israel Katz warned of a possible "all out war" with Lebanon's Hezbollah, even as the U.S. attempted to avoid a broader conflict between Israel and the Iran-backed group.</p><p>An escalating war risks supply disruption in the key oil-producing region.</p><p>"Any cooling off between both parties seems difficult in the near term, which may keep oil prices well-supported as market participants shrug off pockets of weakness on the economic front, from weaker-than-expected U.S. retail sales to mixed sets of data out of China this week," said Yeap Jun Rong, a market strategist at IG in Singapore.</p><p>China data this week showed May industrial output lagged expectations, but retail sales, a gauge of consumption, marked the quickest growth since February.</p><p>Meanwhile, US crude stocks rose by 2.264 million barrels in the week ended June 14, market sources said on Tuesday, citing American Petroleum Institute figures. Analysts polled by Reuters had expected a 2.2 million barrel draw in crude stocks.</p><p>However, gasoline inventories fell by 1.077 million barrels, while distillates rose by 538,000 barrels, the sources said, speaking on condition of anonymity.</p><p>Official stocks data from the US Energy Information Administration is due on Thursday. </p>
<p>London: Oil prices hit seven-week highs on Wednesday as summer demand optimism and concerns over escalating conflicts offset an industry report that said U.S. crude inventories unexpectedly rose.</p><p>Brent crude futures gained 0.3%, at $85.56 a barrel by 1525 GMT, while US West Texas Intermediate crude was up by 0.2%, at $81.75 per barrel.</p><p>"The current snapshot presents an underwhelming picture but there are green shoots that indicate a more optimistic outlook," said Tamas Varga of oil broker PVM.</p>.Oil up on firming demand, Mideast tensions underpin risk premium.<p>The Brent price being $8 over the lows hit in early June "shows genuine optimism that the global oil balance will eventually tighten," Varga added.</p><p>Both benchmarks, having recovered strongly in the last two weeks, gained more than $1 in the previous session to seven-week peaks after a Ukrainian drone strike led to an oil terminal fire at a major Russian port.</p><p>In the Middle East, Israeli Foreign Minister Israel Katz warned of a possible "all out war" with Lebanon's Hezbollah, even as the U.S. attempted to avoid a broader conflict between Israel and the Iran-backed group.</p><p>An escalating war risks supply disruption in the key oil-producing region.</p><p>"Any cooling off between both parties seems difficult in the near term, which may keep oil prices well-supported as market participants shrug off pockets of weakness on the economic front, from weaker-than-expected U.S. retail sales to mixed sets of data out of China this week," said Yeap Jun Rong, a market strategist at IG in Singapore.</p><p>China data this week showed May industrial output lagged expectations, but retail sales, a gauge of consumption, marked the quickest growth since February.</p><p>Meanwhile, US crude stocks rose by 2.264 million barrels in the week ended June 14, market sources said on Tuesday, citing American Petroleum Institute figures. Analysts polled by Reuters had expected a 2.2 million barrel draw in crude stocks.</p><p>However, gasoline inventories fell by 1.077 million barrels, while distillates rose by 538,000 barrels, the sources said, speaking on condition of anonymity.</p><p>Official stocks data from the US Energy Information Administration is due on Thursday. </p>