Oil Prices Climb Above 70 Dollars Again

6/16/2006 Houston -- Oil climbed back above $70 a barrel on Friday, rising for a third day as investors grew more optimistic about U.S. economic growth and energy demand after a toned-down inflation warning from the U.S. Federal Reserve.

U.S. light sweet crude rose 68 cents to $70.18 by 0714 GMT, taking gains since Tuesday to more than 1.5 percent in a muted snap-back from a global market rout this week when risk-averse investors sold off stocks and metals on fears that rising inflation could further slow economic growth. Brent crude was up 61 cents at $69.06 a barrel.

Oil, supported also by geopolitical concerns over Iran and the four-month loss of a quarter of Nigeria's production, lagged the earlier losses and also trailed the recovery, which saw the U.S. Nasdaq rise nearly 3 percent and copper leap 5 percent on Thursday. "Oil held up a bit stronger than other resources in the earlier wave of selling, but it is benefiting now from a bit of a return of the speculative element," said Gerard Burg, minerals and energy economist and National Australia Bank.

Financial markets rallied after Federal Reserve Chairman Ben Bernanke toned down his warnings against U.S. inflation, saying expectations of price increases had "fallen back somewhat" and that the impact of high energy prices has been limited.

(Contributed by Reuters)