(AP) - Crude oil prices rose Monday as escalating fighting between Israel and militants in Lebanon created more geopolitical uncertainty in a market already jittery over volatility in producing countries.
Light, sweet crude for August delivery gained 50 cents to $77.53 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore, reports Trend.
The contract reached an intraday record of $78.40 a barrel Friday before settling at an all-time closing high of $77.03.
Gasoline futures rose 1.01 cents to $2.335 a gallon Monday while heating oil prices added 1.65 cents to $2.0925 a gallon. Natural gas prices fell 19.7 cents to $6.150 per 1,000 cubic feet.
Fighting between Israel and militants in Lebanon, which escalated over the weekend, raised fears of a possible full-blown war in the Middle East.
Analysts said the violence was driving oil prices higher though it had no direct effect on oil supplies because it added more nervousness to a market already placed on edge by strong global demand and a tight supply cushion.
"Oil prices are higher because the conflict between Israel and Lebanon worsened over the weekend, and though that obviously doesn't have any direct impact on physical oil supply, people are having trouble seeing where this all ends," said Tobin Gorey, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
Israel lobbed missiles at targets in all corners of Lebanon early Monday, killing 13 and wounding 53 in a surge of reprisals after Hezbollah rockets slammed into new targets deep inside Israel.
Both Israel and Hezbollah signaled over the weekend that their attacks would only intensify in an already brutal fight that has killed at least 174 in Lebanon and 23 in Israel.
Hezbollah on Sunday launched missile attacks on the Israeli city of Haifa after attacking an Israeli warship Friday night.
Israel has said one of the missiles in the Haifa attack came from Syria and said Iran had helped Hezbollah fire a sophisticated radar-guided missile at the Israeli warship.
Fearing the violence could spiral out of control, world leaders meeting in St. Petersburg produced a framework to end the crisis, and a U.N. envoy landed in Beirut for talks. The Group of Eight industrialized nations expressed concern over "rising civilian casualties on all sides" and urged both sides to stop the violence.
The fighting comes amid persistent oil market anxieties about the West's nuclear standoff with Iran, threats of supply disruptions in Nigeria and the Gulf of Mexico hurricane season. Last year, hurricanes Katrina and Rita devastated oil and natural gas production in the Gulf of Mexico.