Oil surged through $146 a barrel on Thursday, heightening expectation the $150 barrier could be breached later in the trading session.

A month ago investment bank Morgan Stanley, one of Wall Street's biggest energy traders, said crude might reach $150 by July 4 -- the US Independence Day holiday -- because of robust Asian demand and falling inventories.

Brent North Sea oil for August delivery surged to a life-time peak of 146.34 dollars. New York's main oil contract, light sweet crude for August delivery, meanwhile surged past 145 for the first time to reach an all-time pinnacle of 145.43 dollars a barrel.

The latest surge followed a warning from Iranian Oil Minister Gholam Hossein Nozari that his country, a key crude producer, would react fiercely to any attack against it. 'Iran, if there were any kind of activity of any sort, is not going to be quiet and would react fiercely,' he told reporters on the sidelines of the World Petroleum Congress in Madrid.

He said oil prices, which have been driven to record levels partly because of fears about the loss of Iran's oil output, would rise radically if Israel or the United States launched a military strike. 'That's the kind of talk that kind of juices the market,' said Jason Feer, vice president and general manager, Asia Pacific, for energy market analysts Argus Media Ltd. in Singapore. - Reuters