Oil prices edge higher as supply risks mount

By Shariq Khan

NEW YORK (Reuters) - Oil prices rose in early Asian trading hours on Friday, setting up a third straight weekly jump, as concerns about supply problems from escalating geopolitical tensions and weather-related disruptions offset signs of weak demand.

Brent crude futures for August settlement, which expire on Friday, rose 15 cents, or 0.2% to $86.54 a barrel by 0020 GMT. The Brent contract for September was also up 0.2% at $85.44 a barrel.

U.S. West Texas Intermediate crude futures for August delivery rose 24 cents, or 0.3%, to $81.98 a barrel.

Oil prices have shrugged off signs of weak demand in the United States, the biggest oil consuming nation, and rallied higher as cross-border strains between Israel and Lebanon's Hezbollah escalated. A widening war in the Middle East could draw in countries like Iran, one of the top oil exporters in the region.