Oil hits another recrod high

Crude oil prices are being driven higher as Israel continued its attack on Lebanon amid concerns that other nations in the region could be pulled into the conflict.  The new worries come on top of concerns about Iran’s nuclear program, the war in Iraq, continuing conflicts in Nigeria, and the effect the Atlantic hurricane season might have on production and supply.

Brent crude for August delivery went as high as $78.03 per barrel in morning trade on the International Petroleum Exchange in London, but by late afternoon it had pulled back to $77.18 per barrel, still a gain of 49 cents during the session.  August Brent contracts expire at the end of trade on Friday.  With that in mind, September contracts traded more than August, also adding 49 cents to $77.68 per barrel.  By early afternoon on the New York Mercantile Exchange, West Texas Intermediate for August delivery had gained 55 cents to $77.25.  Many traders see a rise to $80 per barrel as certain, especially with WTI contracts for November of this year until August of next year already trading at that level or above.

Prices for crude oil were up 5 percent during the week, and they have risen around 27 percent since the beginning of the year.  Despite the increases, which have translated to higher pump prices for gasoline, diesel, and jet fuel, demand has not abated, with the US Department of Energy reporting that demand in the US is up for the most recent four-week period in comparison with the same period last year.