Oil prices soar higher as Middle East conflict escalates

The spectre of disruptions to Middle East oil supplies resulting from the conflict between Israel and Hizbollah has sent the price of crude soaring to new records. It went over 78 dollars a barrel on the New York and London markets. Price peaks in the past included 30 dollars a barrel in 1991 after Iraq’s invasion of Kuwait and 38 dollars following the US led invasion of Iraq.

George Gero at the New York Mercantile Exchange said prices could go either way: “It’s possible to reach 80 US dollars; it’s also very possible to have a pull back if there is a cooling off of a geopolitical event down to 70 US dollars. So I would say a 10 US dollar band based on geopolitical events is very probable.”

Traders fear the conflict could expand in the region, which produces nearly a third of the world’s oil.

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