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

Brent crude futures rose 63 cents, or 0.8 percent, to $77.21 a barrel, while the US West Texas Intermediate (WTI) futures were up 63 cents, or 0.9 percent, at $73.87 a barrel at 0423 GMT.

The world's largest oil producer and consumer has been hit by a second major storm, Hurricane Milton, which made landfall on Florida's west coast, spawning tornadoes and threatening surges of seawater.

The storm has already driven up demand for gasoline in the state, with about a quarter of fuel stations selling out of supplies, which has helped support crude prices.

Further underpinning prices, investors remained wary of escalating tensions between Israel and Iran, with Israeli Defence Minister Yoav Gallant promising an Israeli strike against Iran would be "lethal, precise and surprising".

US President Joe Biden spoke with Israeli Prime Minister Benjamin Netanyahu about Israel's plans concerning Iran in a 30-minute call on Wednesday that the White House described as "direct and very productive".

Biden "continues to discourage Israel from targeting oil facilities, but there is growing concern that Israel's allies have little influence on its strategy," analysts at ANZ said in a note on Thursday.

Even with threats to the oil-producing Middle Eastern region top of mind, concerns about demand continue to underpin the fundamental outlook. The US Energy Information Administration (EIA) on Tuesday downgraded its demand forecast for 2025 on weakening economic activity in China and North America.

EIA data on Wednesday showed crude inventories jumped by 5.8 million barrels to 422.7 million barrels last week. That was a bigger build than analysts polled by Reuters had expected, but much lower than estimated on Tuesday by the American Petroleum Institute industry group.

However, oil demand has grown this month, according to analysts at JPMorgan, helping support prices.

"In the US, gasoline demand surged by 800 kbd week over week.. Across Asia, flight activity rebounded after being disrupted by multiple typhoons. In China, daily flight activity soared to an eight-week high," the analysts said in a note.

"With the majority of travel-related demand now behind us, the focus shifts to the impending weather-driven rise in demand in the coming weeks."