Brent and WTI up about 1
Armed individuals board tanker off Oman
Signs of weakening oil demand cap gains

LONDON, Jan 11 Reuters Oil prices rose on Thursday after an oil tanker was boarded by an armed group in Oman, raising the prospect of escalating conflict in the Middle East.

Brent crude futures gained 1.03, or 1.3, to 77.83 a barrel by 0916 GMT and U.S. West Texas Intermediate crude futures rose 98 cents, or 1.4, to 72.35, though gains were capped by a surprise build in U.S. crude stockpiles.

The United Kingdom Maritime Trade Operations UKMTO authority received a report on Thursday that a vessel about 50 nautical miles east of Oman39;s coast was boarded by four to five armed individuals.

The previous day Yemenbased Houthis mounted their largest attack yet on commercial shipping lanes in the Red Sea and Israeli strikes in southern and central Gaza also intensified.

The United States and Britain hinted they would take further measures if the attacks continued. The United Nations Security Council, meanwhile, passed a resolution demanding an immediate end to the Houthi strikes

The oil benchmarks had settled lower on Wednesday after a surprise jump in U.S. crude stockpiles raised concerns over demand in the world39;s largest oil market.

U.S. crude inventories rose by 1.3 million barrels to 432.4 million barrels in the week ended Jan. 5, the EIA said on Wednesday, against analyst expectations for a draw of 700,000 barrels.

All eyes are now on U.S. inflation data,…