Oil prices rose to a new high of $77 a barrel following intensified geopolitical unrest, particularly with regards to escalating violence in the Middle East.
Crude oil for August delivery rose $1.75 to close at a record $76.70 a barrel on the New York Mercantile Exchange amid confrontations between Israel and Hizbullah and Hamas militants, the west's stand-off with Iran over its nuclear programme and the threat to supplies in Nigeria.
Prices touched $77.05 in after-hours electronic trading.
The Israeli army has today continued air strikes upon Hizbullah strongholds in Lebanon, as well as targeting the country's infrastructure, imposing an effective land, air and sea blockade.
Nigerian Agip is said to be losing 120,000 barrels a day after two of its oil pipelines were attacked by militants earlier this week.
Talks between the US president, George Bush, and the German chancellor, Angela Merkel, yesterday concluded that economic sanctions could be imposed on Iran if Tehran fails to suspend uranium enrichment research.
Iran, the world's fourth biggest oil producer, maintains that its research is peaceful in intent.
The Middle East as a whole produced nearly a third of the world's oil last year and holds over 60 per cent of reserves.