Oil prices climb above US$72 a barrel

New York's main futures contract, light sweet crude for delivery in July, advanced 63 cents to US$72 a barrel after an intra-day peak of US$72.15.

In London trade, Brent North Sea crude for August delivery climbed 66 cents to US$71.72. “I think the general mood is that we're past the worst of the downturn,” said Mark Pervan, a senior commodities analyst with ANZ Bank.

“It continues to be a pre-emptive market in a sense that they are pricing on positive news.”

Positive U.S. data and stronger demand has energized the market in recent days, said analysts, adding that unrest in key oil producers was also supporting oil prices. “We will be going into the weekend with some legitimate geopolitical concerns,” said Olivier Jakob, analyst at Swiss-based research group Petromatrix.

“We will need to keep an Iranian risk premium for the weekend and to it we will add a Nigerian risk premium,” he added.

Iran's supreme leader Ayatollah Ali Khamenei on Friday called for an end to street protests over last week's disputed presidential election, siding with declared winner Mahmoud Ahmadinejad.

Making his first public appearance after daily protests over the official results, Khamenei ruled out any major fraud in the conduct of the poll and warned that the defeated candidates would be held to account over any renewed violence on the streets.

In Nigeria meanwhile, the country's main militant group said it destroyed on Friday a major pipeline supplying crude oil to Italian oil group Agip's Brass exports terminal.

On Thursday, the Movement for the Emancipation of Niger Delta (MEND) also claimed it destroyed a major crude oil pipeline belonging to Royal Dutch Shell as the group stepped up a campaign against foreign oil companies in the country.

Unrest in the Niger Delta has substantially reduced Nigeria's oil output.

Daily oil production in Nigeria currently stands at 1.8 million barrels, according to the latest June report of the International Energy Agency, lower than the 2.6 million barrels of 2006.

Elsewhere this week, the U.S. Department of Energy reported a sharper-than-expected fall in crude inventories, suggesting a hike in demand.

Oil analyst Pervan said crude prices were also closely pegged to the value of the dollar, which has been under pressure.

“I think there's still a high correlation with the dollar,” he said.

A weaker U.S. currency makes dollar-priced crude cheaper for buyers holding stronger currencies. That tends to stimulate demand and push the market higher.

Oil prices touched multi-year lows of around US$32 in December as the economic slowdown crushed demand for energy but have slowly clawed back since.

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