Updated from 10:47 a.m. EDTCrude prices crossed $70 a barrel for the first time in nearly eight months Monday, on fears that the nuclear-research standoff with Iran would lead to a disruption in the nation's crude supplies. Light, sweet crude for May delivery soared $1.08 to close at $70.40 a barrel. Oil futures rose as high as $70.45 in trading Monday, just shy of the contract's record of $70.85 after Hurricane Katrina pummeled the Gulf Coast and shut down much of the area's oil production. On Monday, Iranian President Mahmoud Ahmadinejad said his country will continue to enrich uranium despite Western pressure to stop. The U.N. Security Council has called on Iran to cease nuclear development and gave it until the end of April to do so. Economic sanctions have also been suggested as a way to punish Iran, though they remain unlikely because there is not enough crude to replace Iran's total output of around 4 million barrels per day. "The oil market is taking the threat seriously as Iran may have gone down the path that leads to the point of no return," said Phil Flynn, an energy analyst with Alaron Trading in Chicago. Strong economic growth in China also helped boost energy prices. Chinese President Hu Jintao said on Sunday his country's economy expanded by 10.2% during the first quarter, outstripping economists' expectations for a 9.7% gain. As the world's second-largest oil consumer, a strong Chinese economy keeps energy demand strong. For the past week, crude prices have remained above $68, with traders on edge over the nuclear impasse with Iran. Reports surfaced last week that the U.S. was considering military strikes against OPEC's second-largest oil producer. Still, Iranian officials have maintained that its nuclear development activities are for civilian and not military purposes. Production cuts in Nigeria, where rebels have slashed crude output by 26%, or 641,000 barrels a day, have also roiled the energy markets. Militants in the oil-rich Niger River Delta have blown up pipelines, attacked platforms and kidnapped oil workers to gain a share of the country's petrodollars. Royal Dutch Shell ( RDS-A)has suffered the most losses, with about 455,000 barrels of daily oil production down. The spike in crude prices comes at a time when inventories are at seven-year highs. Domestic oil supplies are currently at 346 million barrels, nearly 8% above a year ago -- more than enough to cover any temporary supply glitches. "The real dichotomy in this market is that crude inventories are very high and that could make for some violent, back-and-forth price action," said Michael Fitzpatrick, an energy analyst with Fimat USA in New York. "For the foreseeable future, the path of least resistance remains up until there is a significant structural economic or political shift." The run-up in crude prices pulled up the rest of the energy market. Unleaded gasoline climbed 6 cents to finish trading at a seven-month high of $2.16 a gallon. Heating oil jumped 4 cents to $2.02 a gallon and natural gas added 44 cents to $7.57 per million British thermal units. Traders disregarded surplus stockpiles and warm weather, which dampens heating demand, and bid up the two heating futures. Gasoline futures have soared over the past month on declining stockpiles and heavy refinery outages. Refiners are racing to phase out methyl tertiary butyl ether before May 5, when liability protection against MTBE ends, in favor of ethanol. Gasoline supplies are now 2% below last year, and traders are worried there won't be enough to meet heavy demand during the peak summer driving season. Energy shares were climbing on higher oil prices. BP ( B)was rising 64 cents to $72.85; Shell was increasing 72 cents to $66.43; ExxonMobil ( XOM) was climbing 47 cents to $62.03, and Total ( TOT)was gaining $1.90 to $135.68. Pogo Producing ( PPP), an oil and gas producer, said it would buy Latigo Petroleum, a privately held company, for $750 million in cash. The deal boosts Pogo's oil and gas reserves by 13% to 2.3 trillion cubic feet of natural gas equivalent and extends reserve life by 10 years. Latigo, which owns properties in the Texas Panhandle and Permian Basin, was formed by Latigo Management, JP Morgan Partners, and Warburg Pincus, a private equity investor. The sale is expected to close in May. Pogo shares were recently up 12 cents at $52.06. Transocean ( RIG) shares were rising $1.52 cents to $84.22 after the offshore drilling contractor said it won a two-year contract from Reliance Industries Limited worth an estimated $248 million. The contract, expected to begin in December, would cover drilling in offshore India.