Oil rises to near $71 in Asia, hitting 2009 high

Oil costs closed upon $71 a barrel Wednesday in Asia, achieving a 2009 high, as investors decanted income into the trade goods as a hedge against a breaking U.S. dollar and pretentiousness.

Benchmark crude for July delivery was up 70 cents at $70.71 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Tuesday, it jumped $1.92 to close at $70.01.

Oil has jumped more than 100 percent in three months as traders have cheered news shoing the worst of a severe U.S. recession is likely over, and have brushed off data - such as a 9.4 percent unemployment rate in May - that suggest crude demand will remain weak.

"I wouldn't be surprised if we're testing $80 in a week or two," said Gerard Rigby, energy analyst with Fuel First Consulting n Sydney. "The momentum right now is too strong."

A weaker U.S. dollar and expectations massive fiscal stimulus spending could spark inflation have also bolstered prices. The euro was steady at $1.4073.

The Energy Department's Energy Information Administration said Tuesday that crude prices will likey average $67 a barrel in the second half of 2009, about $16 higher than the first six months of the year. A month ago, the EIA's price-per-barrel forecast for the second half of 2009 was $55. The Energy Department also said global consumption of oil, which has fallen by nearly 2 million barrels per day this year, will begin to rebound in 2010 as the economy recovers.

Wednesday's release of petroleum inventory data from the EIA could provide additional insight about crude demand. Analysts expct a rise of 800,000 barrels.

In other Nymex trading, gasoline for July delivery rose 1.34 cents to $1.98 a gallon and heating oil gained 1.15 cents to $1.82. Natural gas for July delivery was up 6.8 cents at $3.80 per 1,000 cubic feet.

In London, Brent prices gained 53 cents to $70.15 a barrel on the ICE Futures exchange.