Oil pauses above $71 after rise on economic hopes

[sajiv]

Oil pauses above $71 after rise on economic hopes

Oil steadied above $71 a barrel on Friday after bullish U.S. economic data and supply concerns in OPEC member Nigeria boosted prices a day earlier.

Reflecting fresh optimism for an economic turnaround, Asian equity markets followed gains in Wall Street, where the Dow and S&P 500 broke a three-day losing streak following positive job and regional manufacturing reports.

U.S. crude rose 11 cents to $71.48 a barrel by 0155 GMT, and London Brent crude gained 15 cents to $71.21.

"Prices are trailing a bit from yesterday's upward movement. The U.S. data gave people reason for hope that a rebound in the United States may soon arrive," said Ben Westmore, a commodities analyst at National Australia Bank.

The reading on the Philadelphia Federal Reserve business activity index was the highest since September 2008, and the Conference Board's forward-looking measure of the U.S. economy posted its biggest increase in five years in May.

On jobs, the number of U.S. workers filing new claims for jobless benefits rose last week, but the number of people staying on the benefits rolls fell for the first time since January, data showed on Thursday.

Japan's Nikkei average rose 0.6 percent by 0143 GMT, while the MSCI index of Asia-Pacific shares outside Japan climbed 0.5 percent.

Oil prices have nearly doubled since February on signs of a potential economic recovery but the pace of the rally has also sparked concerns that prices do not fully reflect improvements in oil fundamentals, and costly crude may hurt any nascent recovery.

President Barack Obama remains concerned about speculation in the oil markets even though he has not proposed concrete steps to rein it in, White House spokesman Robert Gibbs said on Thursday.

As a presidential candidate, Obama supported enaction of requirements that would limit U.S. energy futures to trade only on regulated exchanges.

Oil prices also found support after Royal Dutch Shell confirmed some oil production had been halted following an attack on one of its pipelines on Wednesday in Bayelsa state in Nigeria.