Oil prices rose on Thursday underpinned by a spike in fuel demand as a major storm barrelled into Florida and concerns about potential supply disruptions in the Middle East amid heightened tensions between Israel and major oil producer Iran.

Oil rose further on Wednesday amid speculation Iranian oil facilities could be the target of an Israeli retaliation against Tehran.

What goes up...? Oil prices are down sharply Tuesday while traders await an Israeli strike on Iran, with benchmark U.S. crude momentarily falling at its steepest daily rate in a year. West Texas Intermediate futures tumbled by as much as 5%,

Oil prices edged higher on Thursday, underpinned by a spike in fuel demand as a major storm barrelled into Florida, with Middle East supply risks also in focus.

International oil traders have been anxiously watching for Israel's expected military response to Iran's latest rocket attack, with prices rising and dipping according to the latest guesses on whether Israel will target Iran's oil infrastructure and how Tehran might respond.

Oil prices have spiked as speculation mounts that Israel could next target Iran's oil or nuclear facilities. Could prices rise to $200 a barrel or will the excess oil supply mean the impact is limited?