Oil rises over $75 on Middle East concern

Oil rose further above $75 a barrel this morning as dealers saw little hope for a quick end to the conflict in Lebanon and refinery…

Oil rose further above $75 a barrel this morning as dealers saw little hope for a quick end to the conflict in Lebanon and refinery outages threatened to tighten supplies in the midst of the US summer driving season.

US crude for September rose 37 cents to $75.42 a barrel by 8.04am, climbing for a third day, while London Brent crude gained 45 cents to $75.06.

US Secretary of State Condoleezza Rice holds talks with Israeli Prime Minister Ehud Olmert on today, one day after meeting Lebanese leaders in an effort to end a two-week war between Israel and Hizbullah guerrillas that oil traders fear might destabilise exports from major regional producers.

But she offered little hope for an immediate end to the conflict, and a White House spokesman said any immediate ceasefire would be "unenforceable".

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Oil hit a record-high of $78.40 earlier in July on fears the fighting could spread to other parts of the Middle East, which produces about a third of the world's oil.

Gains gathered pace after traders said a crude distillation unit at Venezuela's Amuay refinery - part of the world's biggest refining complex and a top supplier of US gasoline imports - will be shut for five to seven months following a fire last week.

Hiccups at several US plants, forecasts for a tropical disturbance to form in the Gulf of Mexico in the next few days and news that Royal Dutch Shell had been forced to trim more output at its Nigerian oilfields added to the unease.

Surging oil demand from China, which posted its third month of double-digit growth amid soaring fuel oil imports and curbed gasoline exports, lent additional support.

Apparent oil demand from the world's second-largest consumer rose 15 per cent in June from a year ago, putting the first-half increase at 8 per cent.