Middle East tensions fuel oil price

Oil prices have set a new high above $147 a barrel amid fears over growing tension in the Middle East.

Brent crude reached $147.02 on the London-based ICE Futures Exchange. It has now risen more than ten dollars in the past two days.

Analysts cited concerns over missile tests by Iran, a member of oil production cartel Opec, as being behind the surge.

Brent's previous high was $146.69 a barrel set on Thursday last week.

The commodity fell to the $136 level earlier this week amid expectations that a global economic slowdown would lower demand for oil.

But markets were rocked after Iran's state media reported a series of missile tests, including one munition that could reach Israel. Israel responded with a pledge to act if its national security was threatened.

Amid the oil price rise, London's top flight share index was showing a fall of more than 1 per cent, taking it to its lowest point this year.

Stock markets across Europe were also showing significant declines, with Frankfurt's Dax down nearly 2 per cent, and the Paris CAC 40 down more than 2 per cent.

Crude's latest spike means oil prices have risen around 50 per cent this year.

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