Crude-oil futures rallied above $40 a barrel in electronic trading Monday, as Israeli air raids continued in the Gaza Strip, heightening geopolitical tensions in the Middle East. Light, sweet crude for February delivery rose $2.39, or 6.3%, to $40.07 a barrel in electronic trading on Globex. Earlier, the contract soared to an intraday high of $42.20 a barrel. "Oil prices continue to rise on concerns that Israeli air strikes in the Gaza strip may disrupt supply from the Middle East, the world's largest producing region," said analysts at Action Economics. On Friday, oil futures ended up $2.36, or 6.7%, at $37.71 a barrel on the New York Mercantile Exchange. Despite the gain, oil finished the week down 11%. In the Gaza Strip, Israeli air strikes aimed at targets linked to militant group Hamas continued for a third day, the BBC reported on Monday. Hamas said 300 Palestinians have died since Saturday, while the United Nations said that 56 civilians are dead, according to the report. In Israel, a second person was killed by a militant rocket, the report said. Israeli Defense Minister Ehud Barak said Israel was not fighting the people of Gaza but was in "a war to the bitter end" with Hamas, the BBC reported. "Although ongoing tensions could keep things fairly well bid for a while, we suspect that prices will eventually buckle under the relentless barrage of poor macroeconomic headlines, as the latter should overpower the bullish impact of the geopolitics, admittedly a stark departure from what we were seeing in the markets a few years ago when the roles were reversed," said Edward Meir, an analyst at MF Global, in a research note. Also on Globex Monday, reformulated gasoline for February delivery rose 6 cents, or 7%, to 94 cents a gallon and February heating oil rose 6 cents, or 5%, to $1.33 a gallon. February natural gas futures gained 16 cents, or 3%, to $5.97 per million British thermal units.

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