Crude gains on Middle East conflict

Oil rose to a five-week high at $48.81 a barrel on fears the Israeli-Palestinian conflict will disrupt supplies from the area. (Winslow Townson/Associated Press)

DALLAS - Crude oil rose to a five-week high on speculation the conflict in the Gaza Strip may spread, disrupting oil supplies from other parts of the Middle East.

Oil gained as Israel expanded its hold over the territory it abandoned three years ago, bombarding new Palestinian targets from the air and deploying tank columns and soldiers through northern Gaza. An official from a Persian Gulf member of OPEC also helped fuel the increase, saying the group - which produces more than 40 percent of the world's oil - is likely to make all the output cuts promised at its last meeting, causing global stockpiles to fall this quarter.

Oil for February delivery rose $2.47, or 5.3 percent, to $48.81 a barrel on the New York Mercantile Exchange, the highest settlement since Dec. 1. Earlier, the contract touched $49.28 a barrel. Prices have rallied 38 percent since Dec. 24.