Light, sweet crude for February delivery rose to US$47 on the New York Mercantile Exchange on Monday in Asia when tensions mounted as Israel amplified a ground offensive against Hamas militants in Gaza. Thousands of Israeli troops backed by tanks and helicopter gunships surrounded Gaza's largest city and fought Hamas militants at close range Sunday, with attacks ranging from airstrikes to artillery shelling and ground fighting. More than 512 people have died in Gaza along with 5 Israelis since launch of the offensive on December 27.
Oil prices are likely to rise in the short term as this entry of Israelis into Gaza has increased fears of the possibility of a wider Middle East conflict along with OPEC's pledge to cut output by 4 mln bpd since October. An attack on an oil pipeline in South Nigeria has also helped shore up prices.