Crude oil fell for a second day on speculation shipments from the Middle East, source of a third of the world's oil, won't be disrupted by the military conflict in Lebanon.
``Over the last few weeks we have already priced in a couple of worst-case scenarios,'' said Kyle Cooper, director of research at IAF Advisors in Houston.
Prices rose to a record last week after Israeli forces attacked Lebanon in response to the seizure of two soldiers on July 12. No Middle East nations have threatened to cut exports because of the Israeli offensive. Oil surged in 1974, helping spur a recession in the developed world, after an oil embargo that followed the Arab-Israeli war in October 1973.
Crude oil for August delivery fell $1.70, or 2.3 percent, to $73.60 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $78.40 on July 14, the highest since trading began in 1983. Prices are up 28 percent from a year ago.
Brent crude oil for September settlement rose $1.31, or 1.7 percent, to $74.61 a barrel on the London-based ICE Futures exchange.
Israeli Prime Minister Ehud Olmert told the United Nations he will press the military operation in Lebanon until the soldiers are returned and Hezbollah is disarmed. Yesterday, Olmert blamed the conflict on Iran and Syria.
`No Direct Impact'
``There is no direct impact on oil shipments as a result of the violence but we all know that the big guy behind Hezbollah is Iran,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``There is a big concern that Israel may take action against Iran, which could have a major impact.''
Prices jumped 21 percent this year amid concern Iran, the fourth-largest producer, might cut exports because of efforts to curb its nuclear program. Iran may hold talks with the European nations to try to solve the dispute over the Islamic republic's nuclear program, President Mahmoud Ahmadinejad said today, the state-run Iranian News Agency IRNA reported.
``Over the last few weeks we have already priced in a couple of worst-case scenarios,'' said Kyle Cooper, director of research at IAF Advisors in Houston.
Prices rose to a record last week after Israeli forces attacked Lebanon in response to the seizure of two soldiers on July 12. No Middle East nations have threatened to cut exports because of the Israeli offensive. Oil surged in 1974, helping spur a recession in the developed world, after an oil embargo that followed the Arab-Israeli war in October 1973.
Crude oil for August delivery fell $1.70, or 2.3 percent, to $73.60 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $78.40 on July 14, the highest since trading began in 1983. Prices are up 28 percent from a year ago.
Brent crude oil for September settlement rose $1.31, or 1.7 percent, to $74.61 a barrel on the London-based ICE Futures exchange.
Israeli Prime Minister Ehud Olmert told the United Nations he will press the military operation in Lebanon until the soldiers are returned and Hezbollah is disarmed. Yesterday, Olmert blamed the conflict on Iran and Syria.
`No Direct Impact'
``There is no direct impact on oil shipments as a result of the violence but we all know that the big guy behind Hezbollah is Iran,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``There is a big concern that Israel may take action against Iran, which could have a major impact.''
Prices jumped 21 percent this year amid concern Iran, the fourth-largest producer, might cut exports because of efforts to curb its nuclear program. Iran may hold talks with the European nations to try to solve the dispute over the Islamic republic's nuclear program, President Mahmoud Ahmadinejad said today, the state-run Iranian News Agency IRNA reported.
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