Updated from 1:14 p.m. EDTOil futures closed higher Friday as speculation swirled that Israel was preparing for a ground invasion of Lebanon. The newly benchmarked September crude contract added 16 cents to close at $74.43 a barrel. Israel's army called up several thousand reservists to augment its forces, fueling worries the country is about to invade Lebanon. Israeli bombers pounded southern Lebanon and dropped leaflets warning residents to flee. Hezbollah rockets hit Haifa, wounding 10 people. More than 330 people have died in the 10 days of fighting, which began after Hezbollah kidnapped two Israeli soldiers. Evacuations of civilians picked up, with the U.S. Marines landing in Beirut Thursday for the first time since 1984. More than half a million people have fled Lebanon since the fighting began. The U.N. called for an immediate cease-fire. U.S. Secretary Condoleezza Rice is planning a trip to the Middle East as soon as Sunday. Both Hezbollah and Israel rejected calls for a cease-fire on Thursday, with Israel refusing to end its attacks until Hezbollah is "incapacitated," the Israeli ambassador to the U.N. said, Bloomberg reported. For its part, the militant group said it won't release the Israeli soldiers unless Israel agrees with a prisoner swap. Oil prices have risen 22% this year on a raft of geopolitical problems, including an impasse with Iran over its nuclear ambitions, rebel attacks on Nigeria's oil installations and Venezuela's attempts to nationalizes its oil industry. Although the conflict between Hezbollah and Israel does not affect oil supplies, traders are concerned the conflict could widen and drag in Iran, which backs the militants with weapons and money. Iran is the world's fourth-largest crude producer. Traders have reason to worry about the current crisis between Israel and Hezbollah. The Arab-Israeli war in 1973 sparked an oil embargo from the Middle East. Oil prices skyrocketed and helped bring on a recession. Gasoline prices jumped 4 cents to settle at $2.29 a gallon on refinery outages across the country. ConocoPhillips ( COP) shut its Wood River refinery in Illinois, which processes 306,000 barrels per day, for storm-related repairs. 'Valero Energy ( VLO) also shut a gasoline production unit at its Lake Charles refinery in Louisiana this week for 20 days. Valero expects to lose 65,000 barrels per day, or 1.3 million barrels while it makes repairs. Heating oil climbed 2 cents to $1.95 a gallon. Despite a supply glut, natural gas tacked on 4 cents to $6.13 per million British thermal units as more utilities switched to cheaper natural gas. There is 18% more supplies than last year, easing any concerns there wouldn't be enough for summer cooling demands. Forecasts of cooler temperatures in the West were also helping dampen prices. Meanwhile, stock indices tracking the oil industry were falling Friday, down 1% to 2% on the Amex Oil Index and the Philadelphia Oil Service Index. Valero, Hess ( HES), Marathon Oil ( MRO) and Sunoco ( SUN) were posting the largest declines among drillers and refiners, down 1% to 2%. Halliburton ( HAL) were leading declines among oil service companies, shedding 8% thanks to lower-than-expected earnings. During the second quarter, profits rose 51% during the second quarter thanks to high prices and demand, offsetting a drop in military contracts and rebel attacks on its installation in Nigeria. Other oil-field companies weren't faring well either. Weatherford International ( WFT), Cameron International ( CAM) and Smith International ( SII) were also posting declines of 4%. Robust earnings turned Schlumberger ( SLB) into the only bright spot on the index, rising 1%. The company said earnings soared 78% in the second quarter thanks to strong oilfield service revenues, and it expects more of the same this year. Profit jumped to $856.9 million, or 69 cents per share, beating analysts' expectations of 63 cents per share.