With Middle East Crisis Oil Prices All Time High

Oil prices settle near $77 a barrel


Traders work the oil futures pit at the New York Mercantile Exchange, Thursday, July 13, 2006. Oil prices shot up to a new high, roiling stocks on Wall Street, as hostilities in the Middle East escalated. (AP Photo/Mary Altaffer)

July 13, 2006

By BRAD FOSS, AP Business Writer

WASHINGTON -Oil prices settled at a record above $76 a barrel Thursday in a market agitated by escalating violence in the Middle East and the threat of supply disruptions there and beyond.

The latest surge in oil shook stock-market investors' confidence, though economists said most U.S. consumers and businesses appear to be absorbing higher energy costs surprisingly well.

U.S. gasoline demand continues to rise in spite of near $3-a-gallon pump prices, core inflation remains relatively low and the U.S. economy is forecast to grow by roughly 3 percent in the second half of the year.

"Two years ago I might have said that $70 or $75 a barrel would be some kind of a tipping point. Now I'm not so sure anymore," said Nariman Behravesh, chief economist at Global Insight, a private forecasting firm.

Still, Behravesh said lower-income Americans are suffering disproportionately from higher energy costs and "I could certainly make a policy case for helping them out on a temporary basis."

Light sweet crude for August delivery shot up as high as $76.85 a barrel on the New York Mercantile Exchange before settling at $76.70. The rally came as fighting between Israel and Lebanon intensified, explosions hit Nigerian oil installations and a diplomatic standoff dragged on between the West and Iran over its nuclear program. Read more...