August 02, 2006	Wednesday	Rajab 6, 1427

LONDON, Aug 1: World oil prices vaulted higher on Tuesday as traders worried about a lack of progress in the Middle East and renewed fears of a regional conflict.

Crude futures were also supported by concerns over Iran, one day after the UN Security Council ordered the major oil producer to freeze sensitive nuclear work by the end of August.

Added to the supply picture, traders seized on news that the third tropical storm of the 2006 hurricane season, Chris, was forming in the Atlantic, which could threaten oil facilities in the US.

New York's main contract, light sweet crude for delivery in September, surged $1 to $75.40 per barrel in pit trading on Tuesday, after striking $75.45--the highest level since July 18.

In London, Brent North Sea crude for September delivery soared $1.37 to $76.52 per barrel in electronic deals. It earlier hit 76.58, which was also last seen on July 18.

“Prices trade above $75 as market concerns grow over the lack of progress in the Middle East,” noted Barclays Capital analyst Kevin Norrish.

A meeting of European Union foreign ministers on Tuesday ended without a call for an immediate ceasefire.

Israel will resume full air attacks against Hezbollah positions in Lebanon early Wednesday, Trade Minister Eli Yishai told army radio on Tuesday.

Meanwhile, Syria said that it does not rule out coming under attack as Israel presses its three-week-old offensive against Lebanon with US backing.

The Israeli assault against its northern neighbour “comes as part of a premeditated plan and a political agenda agreed by the United States, Israel and some other regional parties”, Syrian Foreign Minister Walid Muallem told reporters.

Concerns that the high level of tension in the area might cause a regional conflict in the Middle East caused oil prices to soar to all-time high points above $78 last month.—AFP