World oil prices hit seven-week peaks on Thursday as traders fretted over the impact of simmering geopolitical tensions in the crude-rich Middle East.
In early morning deals, Brent North Sea oil for delivery in September surged to $106.49 a barrel and New York's light sweet crude for August struck $90.85 -- the highest levels since May 30.
Brent later stood at $106.36, up $1.20 from Wednesday's closing level, while New York crude was 90 cents higher at $90.77.
"Within just a week, prices have climbed by more than eight percent, primarily on the back of geopolitical risks," said Commerzbank analyst Carsten Fritsch.
"The conflict in Syria, which has already been underway for 16 months, appears to be escalating.
"The Iran (nuclear) conflict is also coming into increasingly sharp focus, Israel having blamed Iran for the attack on Israeli tourists in Bulgaria," he added.
Israeli officials on Thursday unanimously accused Iran and Lebanese group Hezbollah of carrying out a deadly attack against Israelis in Bulgaria, setting the stage for new tensions in the Middle East.
The bombing of a bus at Burgas airport on the Black Sea killed five Israeli tourists and injured more than 30, Israel's foreign ministry said in what was the deadliest attack on Israelis abroad since 2004.
Israeli Prime Minister Benjamin Netanyahu immediately pointed the finger at Iran.
"All the signs point to Iran," he said in a statement on Wednesday evening, linking the blast to a string of attempts to attack Israelis around the world.
"Israel will respond forcefully to Iranian terror."
Iran responded by saying it strongly condemns "all terrorist acts."
Crude futures had risen on Wednesday, driven also by news of worsening violence in Syria.
Rebels claimed a bomb attack in Damascus that killed three of President Bashar al-Assad's security chiefs.
The bombing prompted US Defense Secretary Leon Panetta to warn that Syria was "spinning out of control."
Oil won more support from Wednesday's strong US company results and housing data, and Federal Reserve Chairman Ben Bernanke's comments that the US central bank remained ready to act to help the weak American economy.
"Oil was in focus not only because of the Fed chairman's comments, but also due to rising geopolitical tensions," said PVM Oil Associates analyst Tamas Varga.
"We had a stark reminder yesterday that the Arab spring is still very much alive.
"Syrian oil production capacity is only around 400,000 barrels per day, but when a suicide bomber kills a minister who was a close ally of the ruler of the country, it is inevitable that oil prices go up."
Market sentiment was also boosted by Wednesday's weekly US energy inventories report.
The US Department of Energy revealed that American crude stocks sank by 800,000 barrels in the week ending July 13. That was the fourth weekly decline in a row and indicated solid demand in the world's biggest oil consumer.
Prices had risen at the start of the week on tensions over major crude producer Iran.
Iran on Tuesday said that US military deployment in the Gulf was "a source of insecurity," after the fatal shooting of an Indian fisherman by a US navy ship in waters off Dubai.
The US navy has been building up its forces in the oil-rich Gulf region amid mounting tensions with Iran over its controversial nuclear programme.
Tehran has warned it could close the Strait of Hormuz, in the southern Gulf, if international sanctions begin to bite, potentially disrupting shipping and world oil supplies through the strategic waterway.