Oil price climbs on supply worries

SINGAPORE - Oil topped US$70 yesterday as investors refocused on risks to supply as Iran rebuffed a UN call to stop work on nuclear fuel and Venezuela threatened to raise oil royalties and taxes.

Analysts also expect petrol supplies in the United States to tighten before the northern summer, despite a surprise stock-build last week which helped drive down oil prices by more than 6 per cent.

US light crude for June delivery climbed 21c to US$70.40 ($109.71 ) a barrel, inching up from a low of US$69.94 reached last Thursday.

Prices are almost US$5 below the record highs touched two weeks ago but up more than 15 per cent since the start of the year.

"Support is very strong at US$70 and buying sentiment is quite firm looking forward," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.

"Already, there has been active buying by the funds in the market and it looks as if prices are headed up this week. There's not been any improvement in Iran and Nigeria and the situation in Venezuela is also adding to bullish sentiment. "Despite the unexpected stockbuild, it will be the tightening gasoline situation in the US that could eventually push oil prices to the US$80 region."

Geopolitical concerns and the weak US dollar - which sank to an eight-month low against the yen - also prompted fund speculators to pile into the metals markets, sending spot gold to a fresh 25-year peak and copper to record highs.

- REUTERS