July 7 (Bloomberg) -- Crude oil reached record highs in New York and London amid concern supplies will be disrupted by disputes about Iran's nuclear research and North Korea's missile tests.

North Korea, which test-fired at least seven missiles this week, yesterday vowed to continue missile tests, saying it doesn't have to notify the U.S., Japan and other countries about launches that are part of its regular military training.

``The North Koreans might soon launch another missile trying to beat the U.S.'' opposition, said Bruce Evers, an oil analyst with Investec Securities in London. ``There are similar geopolitical tensions over Iran and North Korea, and the U.S. data wasn't enough to push oil off this level.''

Crude for August delivery rose as much as 64 cents, or 0.9 percent, to a record $75.78 a barrel on the New York Mercantile Exchange and traded at $75.45 at 2:15 p.m. London time. Brent for August rose as much as $1.01 to a record $75.09 on the ICE Futures Exchange in London and recently traded at $74.69 a barrel.

Earlier today, oil fell as much as 42 cents after the U.S. Energy Department reported yesterday the nation's gasoline supplies unexpectedly rose last week. Gasoline stockpiles grew by 727,000 barrels; analysts expected a decline of 500,000 barrels, based on the median estimate in a Bloomberg News survey of nine analysts.

Oil has risen about 24 percent this year in New York, partly on concern a confrontation over Iran's nuclear research will lead to an interruption of oil supplies from the Islamic republic, the world's fourth-largest producer. Crude was also propped up by militia attacks in Nigeria, Africa's largest oil producer, which has cut about a fifth of the nation's output.

``Put it all together and we are holding very strong,'' said Kevin Blemkin, a broker with Man Financial Plc in London.

Nigerian Kidnapping

Royal Boskalis Westminster NV, the world's largest dredging company, said one of its employees was kidnapped in Nigeria yesterday while working on a Royal Dutch Shell Plc project in the country's Bayelsa state.

Shell's Nigerian venture has not resumed full production in the western Niger delta since a series of attacks that began in January, spokeswoman Caroline Wittgen said July 5. Output of about 473,000 barrels a day remains halted, she said.

``We expect the oil price to rise because a very strong hurricane season is expected and because of geopolitical uncertainties, such as the conflict with North Korea,'' said Claudia Kemfert, the head of energy at Germany's DIW economic research institute. ``Also, the oil market as a whole is very tense, so that we don't expect a relaxation.''

Gasoline Supplies

Prices will probably rise again next week on expectations surging demand will reduce gasoline supplies, according to analysts and traders surveyed by Bloomberg News. Concern that a confrontation with Iran or North Korea could disrupt supplies will help push prices higher, they said.

Twenty-six of 38 analysts in the survey predicted prices would rise. It was the most bullish response in a year.

``In spite of the high prices, oil demand for transportation continues to increase at an astonishing rate,'' Francisco Blanch, Merrill Lynch & Co.'s London-based commodities strategist, wrote today in an e-mailed report. ``Demand for gasoline, diesel or jet fuel remains well supported around the world, helped by a positive economic outlook.''

Iran won't respond next week to a European Union offer of incentives in return for ending its enrichment of uranium, Agence France-Presse reported, citing a senior official in Brussels. The U.S. and EU are pressing Iran to respond to the offer before the Group of Eight summit July 15 in Saint Petersburg, Russia.

Iran's top nuclear negotiator, Ali Larijani, met with European Union foreign-affairs chief Javier Solana yesterday. A meeting with representatives of the five permanent members of the Security Council is planned for July 11.

``The linchpin is Iran,'' said Claudia Kemfert, the head of energy at Germany's DIW economic research institute. ``If no agreement is reached here, the oil price will explode.''

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: July 7, 2006 09:31 EDT