World oil prices hit new highs as battle commences for Najaf

by Veronique Dupont
NEW YORK, Aug 12 (AFP) - World oil prices careened to all-time highs Thursday as the launch of battle for Iraq`s holy town of Najaf spread fear of a retaliatory attack on the oil industry.
New York`s main contract, light sweet crude for delivery in September, shot up 95 cents to an unprecedented 45.75 dollars a barrel by mid-afternoon.
London`s benchmark Brent North Sea crude for September surged 75 cents to a record 42.32 dollars, breaking above 42 dollars for the first time.
"It looks like they are making a final drive on Najaf," said Fimat market analyst Mike Fitzpatrick.
The attack spread concerns on the world oil market about a threat by Shiite Muslim militia to blow up major pipelines in the case of such an assault, he said.
"That is clearly the headline this morning."
US marines and warplanes spearheaded a massive two-pronged assault to crush a Shiite Muslim uprising in Najaf after 24 hours of nationwide fighting left 165 Iraqis dead and 600 wounded.
American jets screeched overhead as explosions and tank and machine-gun fire boomed through the city and smoke engulfed its historic centre, home to the Imam Ali shrine, revered by Shiites all over the world.
Shiite militia repeated a threat to attack oil infrastructure in the face of the US-led offensive.
Militia leader