FX.co ★ Oil Prices Rebound Amid Middle East Tensions

Oil prices rose over 1 percent on Wednesday after plunging more than 5 percent in the first two days of the week on demand concerns.

Benchmark Brent crude futures jumped 1.1 percent to $85.92 per ounce, while WTI crude futures were up 1.2 percent at $81.94.

Supply concerns returned to the fore after Israeli airstrikes hit a densely populated refugee camp in the Gaza Strip on Tuesday, killing at least 50 Palestinians and a Hamas commander.

Hamas' armed wing al-Qassam Brigades claimed today that Israel's air strikes on the Jabalia refugee camp led to the death of 7 hostages, including three with foreign passports.

Israel prime minister Benjamin Netanyahu said the country's war against Hamas will continue despite "painful losses".

Traders also reacted to the latest inventory data and awaited the outcome of Federal Reserve meeting later in the day for directional cues.

Data from the American Petroleum Institute industry body revealed that U.S. crude stockpiles rose by 1.3 million barrels last week, slightly less than expected.

Official data from the Energy Information Administration will be published later in the session.