Speculation That Israel May Attack Iran Raises Oil Prices

Crude oil rose more than $4 to a record on concerns that Israel may be preparing to attack Iran, while a strike in Brazil and renewed militant activity in Nigeria threaten to cut supplies.

Oil rallied to a record high of $145.98 a barrel after the Jerusalem Post said Israeli war planes practiced over Iraq, adding to speculation the country is preparing to attack Iran. A Brazilian union said it plans a five-day strike on platforms that pump 80 percent of the country's crude and Nigerian militants pledged to renew attacks on oil facilities.

``Iran and Nigerian political woes dominate proceedings,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Traders are wary of continuity of physical oil supplies.''

Crude oil for August delivery rose as much as $4.33, or 3.1 percent, to an all time high of $145.98 a barrel on the New York Mercantile Exchange and was trading at $145.17 at 12:25 p.m. in London.

Israeli war planes are conducting maneuvers in Iraqi airspace and using U.S. airbases in the country, possibly practicing for a strike against Iran, the newspaper reported, citing comments by Iraqi officials in local media. Israeli government spokesman Mark Regev denied the report.

Iran, OPEC's second biggest producer, this week tested missiles capable of reaching Israel.

Brent crude oil for August settlement rose as much as $4.37 a barrel, or 3.1 percent, to $146.40 a barrel and was trading at $145.66 at 12:25 p.m. local time on London's ICE Futures Europe exchange.

Falling Stockpiles

Yesterday, the contract gained $5.45, or 4 percent, to $142.03 a barrel. Prices climbed to a record $146.69 on July 3.

Oil may rise next week because of threats to supply from Iran and Nigeria and falling stockpiles in the U.S., the biggest energy-consuming country, according to a Bloomberg News survey.