Friday, July 14 2006 13:51 Hrs (IST) - World Time -

Singapore: Oil prices touched fresh record peaks above 78 dollars a barrel in Asian trade today (July 14, 2006), continuing a frenzied spiral as Israel widened a military offensive in Lebanon.

At 8.45 am (0615 IST), New York's main contract, light sweet crude for delivery in August, was at 77.92 dollars per barrel, up 1.22 dollars from its most recent settlement of 76.70 in late US trade.

It had reached touched an all-time high of 78.40 dollars a barrel in after hours electronic trade, erasing previoussummits set in New York overnight.

The upcoming September contract was already trading at above 79 dollars a barrel in an indication prices could still go higher.

"Geopolitical tensions seem to be exploding all over the map, we are firing on all cylinders this week, and the only direction is higher still," said Man Financial analyst Ed Meir.

"Is it war? Well if it isn't it sure is starting to look like it," said Phil Flynn at Alaron Trading.

"The latest escalation could draw others into the conflict and I am not just taking about Lebanon," he said.

John Kilduff at Fimat USA said traders were using oil as a safe haven investment in response to geopolitical uncertainty.

"As a globally important strategic commodity, it has become a haven for investors like gold and the dollar have traditionally been," he said.