Oil prices edged higher in early trade on Thursday as the conflict in the Middle East kept investors on edge about whether it could disrupt oil supplies around the region.

Brent crude futures rose 38 cents at $85.01 a barrel by 0000 GMT, while U.S. West Texas Intermediate crude futures gained 46 cents at $80.90 a barrel.

Iran's Supreme Leader Ayatollah Ali Khamenei called on Muslim states to cease oil and food exports to Israel, demanding an end to its bombardment of the Gaza Strip, state media reported.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), produced around 2.5 million barrels per day of crude in 2022, according to U.S. energy data.

Israeli forces killed another Hamas commander on Wednesday in their second strike on Gaza's Jabalia refugee camp in two days, the military said, as the first group of civilian evacuees from the besieged enclave crossed into Egypt.

Pressing an offensive against Hamas militants, Israel again bombed the densely populated Gaza Strip from land, sea and air in its campaign to wipe out the Islamist group after its deadly cross-border rampage into southern Israel on Oct. 7.

Market participants awaited a Bank of England meeting, expected Thursday. In Europe, October inflation in the Euro zone was at its lowest in two years, a Eurostat flash reading showed, stoking the view the European Central Bank is unlikely to hike interest rates soon. (Reporting by Stephanie Kelly; Editing by Lincoln Feast)