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Oil prices soaring

TEXT OF STORY

MARK AUSTIN THOMAS: The price of oil has hit a new high following the Israeli air raids on Lebanon. Crude reached almost $76 a barrel in London this morning. And as Stephen Beard reports, the crisis is spilling over into other financial markets.


STEPHEN BEARD: For the first time in a decade Beirut airport has been hit by Israeli fire.

Markets fear that Syria could be sucked into the conflict and that might ignite a wider Middle Eastern war. That potential threat to oil supplies has pushed up the price of crude and down the prices of shares.

Most European stock markets dropped more than 1 percent each this morning.

European dealers are fretting about the economic costs of even more expensive oil says Andrew Hilton of the CSFI think tank:

ANDREW HILTON: If oil prices rise through $75-$80, perhaps even to $100 as some doom and gloomsters are talking about, then the impact of that will be pretty profound on the European economy. So it's real.

The escalating violence in Lebanon isn't the only source of upward pressure on the price of crude. Militants knocked out another pipeline in Nigeria today.

In London, this is Stephen Beard for Marketplace. MARK AUSTIN THOMAS: More on Nigeria. Twin explosions hit installations that belong to an Italian Oil Company in the volatile Delta region of Nigeria. Sabatoge is suspected. No word on who's responsible. However militant groups attacking installations this year have cut Nigeria's daily oil exports by more than 20 percent.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.
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