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The Wall Street Journal: Oil News Roundup: July 31, 2006 7:45 p.m.

THE WALL STREET JOURNAL ONLINE

Crude futures rose Monday as fighting between Israel and Hezbollah raged on, keeping traders tense about a possible Mideast supply disruption. Light sweet crude for September delivery rose $1.16 to $74.40 on the New York Mercantile Exchange. Oil traders have been focused for nearly three weeks on the violence between Israel and Hezbollah guerrillas in Lebanon, fearful of possible supply interruptions in the region. Here is Monday’s roundup of energy-related news:

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OIL SLICK: A U.N. official said an oil slick brought on by Israel’s bombing of Lebanon could cause major and long-term damage to the eastern Mediterranean if not dealt with soon, Reuters reports. Achim Steiner, executive director for the U.N. Environment Program said reports indicate that 10,000-35,000 tons of fuel oil spilled into the Mediterranean, covering as much as 80 kilometers (49 miles) of Lebanon’s 225-kilometer coastline, he said. Lebanon’s Environment Ministry said another tank with about 25,000 tons of fuel remains on fire.

•Calm Waters: A quiet hurricane season so far has enabled oil companies to restore more production and brace more platforms, Reuters reports. There has been only one tropical storm in the Gulf and it stayed well east of oil and gas facilities, defying predictions of another bad hurricane season for offshore operations.

•Try Another Gas: Many motorists seeking to gain on gas mileage are filling their car tires with nitrogen, a move used for years by race drivers, large commercial trucks and aircrafts, the Associated Press reports.

•Natural Gas High: Natural-gas futures hit more than a three-month high, as the hot weather across much of the U.S. boosted demand for electricity.

•Capacity Crunch: About 718,000 barrels a day of Nigerian crude oil output, which is about a fourth of the roughly three million barrel-a-day capacity of Africa’s biggest producer, is shut due to militant aggression and leaks in pipelines, according to Reuters.

•No Catastrophe: Even if oil does surge above $100, UPI says, its impact on the broader U.S. and global economies are likely to be limited, some economists say.

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