Oil prices rise for the third consecutive day amid strong U.S. job data and escalating tensions in the Middle East.

HOUSTON, Aug 8 - Oil prices rose for the third straight session on Thursday, driven by positive U.S. jobs data that eased demand concerns and by escalating conflict in the Middle East, which helped prices rebound from an eight-month low on Monday.

Brent crude futures gained 83 cents, or 1.06%, closing at $79.16 a barrel. U.S. West Texas Intermediate crude increased by 96 cents, or 1.28%, settling at $76.19.

The market received a boost after data showed a significant drop in new unemployment claims in the U.S., indicating that the labor market remains strong and allaying some concerns about weakening oil demand. "The latest U.S. jobless claims data suggest a still-growing economy, reducing some of the demand worries," noted UBS analyst Giovanni Staunovo.

Further supporting prices was a larger-than-expected decline in U.S. crude inventories, with the Energy Information Administration reporting a 3.7 million barrel drop last week, marking the sixth consecutive weekly decrease to a six-month low.

Meanwhile, geopolitical tensions continued to influence the market. The recent killing of senior members of militant groups Hamas and Hezbollah raised fears of potential Iranian retaliation against Israel, heightening concerns about oil supply from the Middle East. "A large-scale Iranian retaliation could significantly spike crude prices," warned Tim Snyder, chief economist at Matador Economics.

Adding to the geopolitical concerns, the United Kingdom Maritime Trade Operations (UKMTO) agency reported an incident near Yemen's Mokha, where Iran-aligned Houthi militants have been attacking international shipping since November in response to the conflict between Israel and Hamas.

In Gaza, Israeli airstrikes intensified on Thursday, with at least 40 people killed, according to Palestinian medics, as the conflict with Hamas-led militants escalated and Israel braced for a broader regional war.

Additionally, Libya's National Oil Corp. declared force majeure at its Sharara oilfield on Tuesday due to protests, further supporting oil prices. Analysts at Citi suggested that Brent prices could rebound to the low-to-mid $80s range, citing tight market conditions, ongoing geopolitical risks in North Africa and the Middle East, potential disruptions during hurricane season, and light managed money positioning.