LONDON, May 23: Oil prices firmed on Thursday as a fresh terror attack in the Middle East reversed some of the losses incurred in recent days.

Reference Brent North Sea crude for July delivery rose 27 cents to 25.77 dollars a barrel by early afternoon.

In New York, July-dated light sweet crude futures fell six cents to 26.37 dollars Wednesday, but subsequently rebounded 21 cents in out-of-hours electronic trading.

The rise in prices came after a Palestinian suicide bomber struck a northern Israeli town on Wednesday night, killing himself and two others. A further 27 people were injured, three of them seriously.

Israeli tanks rolled into Hebron and Jenin, where 19 Palestinians were arrested.

Analysts said that the key consideration for the oil market was whether the latest events in the Middle East would lead to an increasing spiral of violence.

But despite the recovery in prices, the London broker said sentiment among the oil companies was pretty negative.

The oil majors seem to see the market as fairly well supplied. If anything spectacular is going to happen to the upside at this time of year it will normally come from the US gasoline market. But it’s difficult to paint a positive fundamental picture of that market, he told AFP.

He said while US demand for gasoline had been strong, stocks remained fairly plentiful.

Strong demand for gasoline traditionally underpins crude oil prices during summer in the northern hemisphere as US holiday makers take to the road in droves for the so-called summer driving season.—AFP