Oil: Price holds steady around US$75

Oil rose to US$75 a barrel on Monday after the United States said an immediate cease-fire in the violence between Israel and Hizbollah is "unenforceable".

News of refinery outages in the western hemisphere in the midst of the US summer driving season also helped push crude higher, dealers said.

US crude for September delivery rose 57 cents to US$75.00 a barrel at 1734 GMT, while London Brent gained 77 cents to US$74.53 a barrel.

US Secretary of State Condoleezza Rice flew unannounced to Beirut on Monday to seek a "sustainable" ceasefire in Lebanon, where Hizbollah guerrillas were battling an Israeli tank incursion in the south.

On her way to the region, Rice said she wanted to create conditions for a sustainable ceasefire in a war that has cost 373 dead in Lebanon and at least 37 Israeli lives in 13 days.

But White House spokesman Tony Snow questioned the viability of an immediate cease-fire.

"I think the notion that you have a cease-fire at this point is unenforceable and does not really get us to the point we need to be at," Snow said.

Oil hit a record US$78.40 in New York earlier in July on fears the fighting between Israel and Hizbollah guerrillas could spread to other parts of the Middle East, which produces about a third of the world's oil. Prices are still up about 21 per cent this year.

Some oil analysts now view the chance of the conflict widening as less likely, making it less of a prop for prices.

"The markets are now viewing the Israeli/Hizbollah conflict as localized, and are not assigning it the same sense of urgency," Man Financial said in a report.

REFINERY, NIGERIA WOES

Oil also gained after traders said a crude distillation unit at Venezuela's Amuay refinery will be shut for five to seven months following a fire.

The plant is part of the giant 940,000 barrel per day (bpd) Amuay-Cardon complex, the world's biggest refining complex and a top supplier of US petrol imports.

Additional supply concerns came on news Exxom Mobil plans to shut two units at its 349,000 bpd Beaumont, Texas for three to four weeks of maintenance in August, traders said.

ConocoPhillips is seeking to set up temporary cooling towers at its Wood river refinery following damage caused by a severe storm last week.

A pipeline leak at the Shell-operated Nigerian Bonny oilfields has cut 180,000 barrels per day of crude output, company officials said on Monday, deepening supply losses from the Opec nation.

The US National Hurricane Center on Monday said a tropical disturbance could form in the Gulf of Mexico over the next day or two. US crude hit then-record prices last summer after hurricanes damaged oil industry installations along the US Gulf Coast.

Oil dipped early on news Iraq had completed repairs to one of two sabotaged oil pipelines that export crude from its northern fields to Turkey and aims to restart the flow this week. The pipelines have been mostly shut due to sabotage since the US-led invasion of Iraq in 2003.

- REUTERS