STEVE INSKEEP, host: The business news starts with the fuel that still runs the world's business.</s>STEVE INSKEEP, host: Attacks between Israel and Hezbollah helped push oil prices to a record high in overnight trading, above $78 a barrel. NPR's Scott Horsley reports.</s>SCOTT HORSLEY reporting: What worries oil traders about the battle on Israel's northern border is the prospect is could involve Iran. Both the U.S. and Israel have suggested that Iran play a role in this week's raid by Hezbollah. Should Iran get drawn into the shooting battle that could affect output of the world's fourth largest oil producer.</s>SCOTT HORSLEY reporting: Energy analyst John Kilduff, of Fimat USA, says that just adds to fears caused by the ongoing diplomatic standoff over Iran's nuclear ambitions.</s>Mr. JOHN KILDUFF (Fimat USA): This is much more dire, because obviously we're staring down a potential armed conflict. And I have to say that this is one scenario that I don't think anybody in the oil market had gamed out.</s>HORSLEY: Rebel attacks in oil-rich Nigeria also helped push crude prices to a record high.</s>HORSLEY: Even with the price of gasoline near $3 a gallon, though, Kilduff said the demand for gas in the week ending June 30th was the second highest on record.</s>Mr. JOHN KILDUFF (Fimat USA): The resiliency the consumer is showing at the pump I have to say is a bit of a head-scratcher at this point. The consumer is going to be continuing to see, though, higher and higher prices at the pump, and I have to believe there will be a breaking point at some point.</s>HORSLEY: Consumers who empty their wallets to fill their gas tanks may be less inclined to spend elsewhere. Concern about a drop in consumer spending helped push stock in Wal-Mart stores down yesterday by more than two percent.</s>HORSLEY: Scott Horsley, NPR News.
The latest fighting in the Middle East pushed oil prices above $78 a barrel overnight. The spike is a reflection of traders' fears that violence in the Middle East could spiral out of control, possibly disrupting oil supplies.