MB Civic

Oil Prices Hit New High of $75.88 a Barrel

Thursday July 13, 5:06 AM EDT

SINGAPORE (AP) — Oil prices hit a record Thursday as an escalation of violence in the Middle East triggered concerns about stability in the region.

Light, sweet crude for August delivery rose 93 cents to $75.88 a barrel in electronic trading on the New York Mercantile Exchange, breaking the previous intraday high of $75.78 set last Friday.

The front-month August Brent contract on London’s ICE Futures exchange also hit a high, climbing 99 cents to $75.38 a barrel, above its previous $75.09 per barrel record notched Friday.

Earlier in the day, 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.

While latest developments don’t directly threaten security of Mideast oil supply, growing instability in region adds a risk premium to prices.

Adding to anxiety in the market was news that Iran was referred back to the U.N. Security Council Wednesday after nuclear talks failed to yield agreements, stirring concerns about how OPEC’s No. 2 supplier might respond.

The United States and other permanent members of the Security Council said Iran has had long enough to say whether it will meet the world’s terms to open bargaining that would give Tehran economic and energy incentives in exchange for giving up suspicious activities.

Any punishment or coercion at the Security Council is a long way off, but the group said it will seek an initial resolution requiring Iran to suspend its uranium enrichment.

Also, Wednesday’s weekly U.S. government report showed a sharp decline last week in domestic crude oil inventories.

In its weekly petroleum report, the Energy Department said commercially available crude oil stocks shrank by 6 million barrels to 335.3 million barrels. Crude supplies are still 2 percent higher than last year.