Oil prices spiked sharply Wednesday, as fears grew the escalating conflict between Israel and Hamas showed signs of spreading to other nations in the Middle East, and possibly setting off disruptions in the global supply of oil.

Risk premiums began to be factored in across the market, following reports of an Israeli missile strike which hit a hospital in Gaza City and was said to have killed hundreds of citizens, including patients, doctors, and individuals who were at the hospital seeking shelter. Initially both sides blamed each other for the incident, with Hamas claiming it was an Israeli missile strike, and Israel saying it was a Hamas rocket which strayed off path. Later video of the scene, showed minimal damage to the hospital, with the majority of the blast seemingly focused on a parking area. However the effects on the market from the early reports were apparent.

Brent crude futures rose almost 3%, to $92.50 per barrel, as West Texas Intermediate crude (WTI) futures rose more than 3% to $89.27 per barrel. Both benchmarks rose over $2 per barrel to hit the highest levels they had seen in more than 2 weeks in the course of the session.

Oil prices were lifted by more than just geopolitical tensions, however. In the week ended October 13, US crude stocks were revealed to have dropped by almost 4.4 million barrels, which was far more than the 300,000 barrel drop which had been forecast by analysts.

Also demand expectations were lifted after Chinese economic data showed faster-than-expected growth for the third quarter, and Chinese government policy measures were seen as likely to support a potential recovery, which would inevitably increase the demand for crude from the world’s second largest economy.

Through September, Chinese oil refinery throughput reached a record daily rate, increasing 12% compared to one year earlier. Refiners raised run rates in an effort to meet the demand being produced by recovering manufacturing activity, as well as for transport fuel over the Golden Week holiday.