NEW YORK (CNNMoney.com) -- Oil prices hit another record early Friday, surpassing $78 a barrel, as escalating violence in the Middle East raised fears about severe supply disruptions.

Light, sweet crude for August delivery hit $78.40 early Friday, surpassing the record from a day earlier. The price then backed off but still finished 33 cents higher at $77.03 a barrel on the New York Mercantile Exchange (NYMEX), another closing record.

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On Thursday, crude hit a trading high of $76.85 a barrel and closed at $76.70, breaking records set last week.

The growing conflict between Israel and Lebanon and fresh supply fears in the world's eighth-largest exporter, Nigeria, have spurred the recent rally.

Prices for NYMEX futures contracts for delivery late this year and early next year are now above $80 a barrel, a sign the markets expect prices to stay high for some time.

Iran's nuclear standoff with the West limped back to the U.N. Security Council, North Korea stormed out of talks with South Korea and falling crude stocks in the world's top oil consumer, the United States, continued to bolster prices.

"Oil is being hit from all fronts by geopolitical problems," Mark Pervan, a resources analyst at Daiwa Securities, told Reuters. "A raft of problems could keep prices at record levels for some time."

Iranian President Mahmoud Ahmadinejad warned Thursday that any Israeli strike on Syria would be considered an attack on the whole Islamic world that would provoke "a fierce response."

Israel battered roads in Lebanon, and jets struck Hezbollah's southern Beirut stronghold Friday, a day after it blockaded Lebanese ports and bombed Beirut's airport in reprisals against the Lebanese guerrilla group's capture of two Israeli soldiers. Hezbollah fired barrages of rockets across northern Israel.

Neither Israel nor Lebanon are oil producers, but both lie at the heart of the Middle East, which collectively pumps nearly a third of global output, leaving oil traders very nervous.

"Israel has flared up badly this week, but it's tension which has been brewing for years," said Pervan. "Then there's Nigeria, where instability is endemic, politics is in turmoil and it's unlikely to change before elections next year."

In Nigeria, two suspected explosions at a crude pipeline operated by Agip, a unit of Italy's Eni, caused oil spills, Nigerian officials said. Eni denied reports of sabotage and extensive oil spills and said the damage would be repaired soon.

That spells fresh uncertainty in Nigeria after Royal Dutch Shell has already shut down 473,000 barrels of daily supply, almost a quarter of output in Africa's top oil supplier, because of rebel attacks.

Oil has jumped about 28 percent in 2006, rallying from below $20 in January 2002 amid rising demand led by the United States and the second-largest oil consumer, China, together with a series of real or potential supply disruptions.

Iran's president Ahmadinejad said the world's fourth-largest oil exporter would not abandon its right to nuclear technology as Tehran's case was referred once more to the Security Council after it delayed accepting a package of incentives designed to prevent it from developing nuclear weapons.

"With Israel and Nigeria, Iran completes the triumvirate of key tensions supporting prices," Pervan told the news agency.

Robust U.S. demand in the face of high prices and falling inventories also has propped up prices.

"Today's records are a supply-side story, not a demand story," Pervan said. "But the draw on U.S. stocks was really severe and you can't underestimate the effect on prices."

U.S. crude inventories slid 6 million barrels last week as imports fell, a government report said Wednesday, five times the decline forecast in a Reuters poll.

-- From staff and wire reports.

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