Oil Prices Hit New Intraday High
Oil prices hit a new high above $76 a barrel Thursday in a market agitated by escalating violence in the Middle East, the standoff with Iran over its nuclear program and news of explosions on Nigerian pipelines.
Israeli warplanes blasted runways at the main army air base in eastern Lebanon near Syria's border Thursday, police said, an attack that could draw the Lebanese army into Israel's war with Hezbollah guerrillas.
Earlier, Israeli warplanes struck the runways of Beirut's international airport as part of a campaign against Hezbollah, which attacked Israeli border positions Wednesday and captured two soldiers.
Adding to market tensions was news that Iran, OPEC's No. 2 supplier, was referred back to the U.N. Security Council Wednesday after nuclear talks failed to yield agreements.
Light, sweet crude for August delivery shot up $1.35 to $76.30 a barrel on the New York Mercantile Exchange, surpassing the previous intraday high of $75.78 set last Friday.
Front-month August Brent on London's ICE Futures exchange also hit a high, climbing to $75.60 before easing back a bit to $75.53 a barrel, up $1.14.
"With little prospect of any good news on Nigeria, Iran and global demand any time soon, the risks remain on the upside and the prospect of a move to, and through, $80 per barrel must be very real, very soon," said Paul J. Harris, head of energy and emissions at Bank of Ireland Global Markets in Dublin, Ireland.
The hurricane season in the Gulf of Mexico could be a catalyst for even more price spikes, Harris said.
Heating oil rose more than 3 cents to $2.0527 a gallon; gasoline rose more than 2 cents to $2.2825 a gallon, and natural gas futures gained 10 cents to $5.880 per 1,000 cubic feet.
In the United States, the national gas price average now hovers near $3 a gallon, CBS News correspondent Susan McGinnis reports, and some experts are saying $3.50 a gallon is inevitable or even $4 may be on the horizon. McGinnis notes that while gas prices have yet to cut into Americans' driving plans in any major way, this could change if prices rise to $4 at the pump.
In Nigeria, officials said twin explosions hit oil installations belonging to oil company Agip, a unit of Italy's Eni SpA, in the volatile southeastern delta region. Officials suspected sabotage in the explosions Wednesday along two pipelines in Baleysa state.
Nigerian officials said the oil installations belonged to Italian oil giant Agip. But in Rome, Agip's parent company Eni SpA's Agip Oil Co. issued a statement denying a report that the blasts had caused a loss of 120,000 barrels of oil a day.
Elsewhere, militants attacked a boat carrying supplies to Chevron Corp.'s offshore Escravos oilfields on Wednesday, sparking a gunbattle that left four Nigerian navy sailors dead, Brig. Gen. Alfred Ilogho said Thursday.
"Geopolitics, the markets, Iran and Iraq and Lebanon, all that turmoil is in the front of people's minds and the tensions in the region gets the most attention," said Kevin Norrish, energy analyst for Barclays Capital in London.
Weekly U.S. government data showed a sharp decline in domestic crude oil inventories.
The Energy Department said commercially available crude oil stocks shrank by 6 million barrels to 335.3 million barrels last week, though crude supplies are still 2 percent higher than last year.