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Oil prices held steady in early Asian trading on Thursday after gaining a dollar a barrel in the prior session as investors braced for a worsening of the Middle East crisis, potentially involving Iran, the third-largest oil producer in OPEC.

Brent crude futures advanced by 4 cents to $90.52 a barrel by 0047 GMT, while U.S. West Texas Intermediate crude futures were up 2 cents at $86.24 a barrel.

Both contracts rose more than 1% in the prior session after three sons of a Hamas leader were killed in an Israeli airstrike in Gaza, feeding worries that ceasefire talks between the two sides might stall. Earlier this week, Israel and Hamas began a fresh round of ceasefire talks in their more than six-month-old Gaza war but those talks have yielded no agreement.

Furthermore, the region is on alert for possible Iranian retaliation over a suspected Israeli air strike on Iran's embassy in Syria at the start of the month. A Bloomberg report on Wednesday said the U.S. and its allies believe major missile or drone strikes by Iran or its proxies against Israel are imminent.

U.S. Secretary of State Antony Blinken has told Israeli Defense Minister Yoav Gallant that the United States will stand with Israel against any threats by Iran, the U.S. State Department said later on Wednesday.

"The market has become increasingly concerned that the Israel-Hamas war could escalate across the Middle East, putting oil supply at risk," ANZ analyst Daniel Hynes said.

Oil traders will also be looking out for a monthly oil market report from the Organization of the Petroleum Exporting Countries (OPEC) due to be published later on Thursday, and the International Energy Agency's oil market report due on Friday.