NEW YORK (CNN/Money) - Oil prices ended at fresh record highs on Thursday as U.S.-led forces sought to crush a rebellion in the holy Iraqi city of Najaf, a move that Shi'ite Iraqi militia have warned could trigger fresh attacks on oil infrastructure.

Light crude for September delivery settled 70 cents higher at $45.50 a barrel on the New York Mercantile Exchange, after earlier touching an all-time record of $45.75 a barrel. The closing price stands well above the previous record high of $45.04 struck Tuesday.

In London, October Brent crude rose 69 cents to close $41.55, after hitting a new peak of $41.80 a barrel earlier in the session.

Iraq's oil exports have run at half normal levels for the last four days as an uprising by an anti-U.S. cleric threatens infrastructure in southern production and export centers.

U.S. Marines launched a major offensive in Najaf Thursday to root out militiamen loyal to Shi'ite Muslim cleric Moqtada al-Sadr. Al-Sadr's militia has threatened to blow up oil pipelines if U.S. forces storm Najaf.

A late-Monday pipeline sabotage attack has already cut loadings from Iraq's two offshore Gulf terminals -- which now handle all the country's exports -- to 960,000 barrels per day, compared with 1.9 million normally. Iraqi officials said they had reopened the pipelines and would resume full exports later on Thursday.

Sabotage has kept a northern pipeline, running from the Kirkuk fields to Turkey, shut most of the time since the U.S.-led invasion last year.

Fears that tightly stretched supplies have left little leeway for any disruptions have added 19 percent, or $7, to a barrel of crude oil since the end of June.

"The most immediate concern remains Iraq, where the prospect of further severe political and economic setbacks appears to be increasing," Paul Horsnell of Barclays Capital bank told Reuters.

A hefty and unexpected drop in U.S. crude inventories on Wednesday has added to concerns that supply may not keep pace with demand, which is growing at the fastest rate in 24 years.

U.S. crude inventories fell by 4.3 million barrels to 294.3 million last week, the U.S. government said in a weekly report.

Adding to supply concerns, about 25 percent of U.S. Gulf of Mexico oil production -- 1.7 million barrels per day (bpd) -- was shut on Wednesday by Tropical Storm Bonnie. Workers were returning to their platforms on Thursday.

Traders also remain worried that the August 15 referendum on the rule of Venezuelan President Hugo Chavez could upset supplies from the world's fifth-biggest exporter.

And Russia's biggest oil exporter, Yukos, continues to battle bankruptcy, trying to avoid any disruption to its 1.7 million bpd of production.

"Everything's gone wrong in the oil market recently. If you wanted to paint the worst scenario picture, you couldn't do much better," said David Thurtell, commodities strategist at Commonwealth Bank of Australia.

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Traders are concerned that a surge in production by the Organization of Petroleum Exporting Countries (OPEC) has left little spare capacity to cope with supply problems, despite assurances by Saudi Arabia that it could increase supply.

Saudi Oil Minister Ali al-Naimi said on Wednesday that Riyadh was pumping 9.3 million bpd of crude and was ready to tap a surplus capacity of 1.3 million bpd, if required.

"Naimi's comment is an effort to deflect pressure from oil-importing states demanding that Saudi Arabia increase supplies; what spare Saudi production there is cannot be brought online easily or quickly," said U.S.-based Strategic Forecasting Inc.

The International Energy Agency adviser on energy to 26 industrialized nations, reckons OPEC's sustainable spare production capacity shrank to 600,000 bpd in July as the cartel raised output to try to contain prices.  

-- from staff and wire reports