U.S. crude rose as much as $2.37 to hit $71.82 a barrel, the highest since July 1. By 1351 GMT, it was trading $1.73 higher at $71.18.

Brent crude gained $1.46 to $73.16.

“We are getting close to the resistance area for crude oil and we need the continued support of equities,” said Olivier Jakob, an analyst at Petromatrix. “As long as this continues, the dips are going to be bought.”

European shares hit a new high for 2009, led by banks. U.S. stocks opened higher.

The latest gain in oil prices brings oil within sight of the 2009 high of $73.38 set in June, where Jakob and other analysts who use past price moves to predict direction see key resistance that prices could struggle to rally beyond.

On Friday, crude rallied almost 4 percent as data showed the U.S. economy shrank at a smaller-than-expected 1 percent annualised pace in the second quarter, raising hopes the recession was easing.

The market climbed about 2 percent last week — the third straight week of gains — which helped to reverse steep losses in the middle of the month and brought July’s monthly decline to a marginal 0.6 percent.

“The U.S. growth number has confirmed that the worst is behind us and the focus now is to find out how quick the recovery will be,” said Ben Westmore, a commodities analyst at the National Bank of Australia.

China’s crude stockpiles in June, including both state strategic and commercial reserves, declined 2.7 percent from a month earlier, the first fall in four months, China OGP, a newsletter run by Xinhua, reported on Monday.

Analysts said a weak dollar, which slid to its lowest point this year on Monday against a basket of currencies amid increased risk appetite, would offer support to oil.

Supply curbs by the Organization of the Petroleum Exporting Countries since last year in response to falling demand have helped crude rally from below $33 in December.

However, output from 11 members from the OPEC rose slightly in July, lowering its compliance rate to its agreed supply curb to 71 percent from 72 percent in June, a Reuters survey showed.

LONDON, Aug 3 (Reuters)

The U.S. jobless rate reached a 26-year high and Euro zone unemployment is at the highest in a decade, reports showed last week. Oil fell even after militants attacked oil installations in major African exporter Nigeria.

“There’s a general retreat caused by lack of risk appetite,” said Mike Wittner, oil analyst at Societe Generale. “For a couple of months, we perhaps got a bit too optimistic and several markets got ahead of themselves.”

U.S. crude fell $2.24 from Thursday’s close to $64.49 a barrel by 1412 GMT. It traded as low as $63.40, the lowest intraday price since May 28. Brent crude fell $1.30 from Friday’s close to $64.31.

NYMEX floor trading was closed on Friday because of the U.S. Independence Day holiday and, although oil traded electronically, the exchange did not issue an official closing price.

Oil pared earlier losses after a report showed the U.S. service sector contracted in June, but at a slower pace than in May. The Institute for Supply Management’s services index rose to 47.0 last month from 44.0 in May.

European stocks <.EU> weakened on Monday following on from losses in Asia. U.S. stocks edged lower. The dollar <.DXY> rose against a basket of other major currencies.

“It’s a definite break to the downside, probably sparked by the poor economic data and stalling stock markets,” said Christopher Bellew, a broker at Bache Commodities in London.

“It’s completely broken through its support at around $68.00-$68.50 and technically and probably fundamentally, heading lower now,” he added, referring to Brent crude.

Investors will focus later this week on a meeting of the Group of Eight industrial nations on July 8-10.

The G8 should not presume a global economic recovery is near, World Bank President Robert Zoellick said in a letter to G8 host Italian Prime Minister Silvio Berlusconi obtained by Reuters on Monday.

In a research note, Societe Generale said the correction in oil prices, which surged 42 percent in the last quarter, was long anticipated. It predicted oil prices would continue falling and average around $60 a barrel in July.

Even after its latest losses, oil has still almost doubled from a low of $32.40 reached in December. Attacks on oil installations in Nigeria, traditionally Africa’s top oil producer, could limit losses.

Chevron , Royal Dutch Shell and Italian energy firm Agip have cut oil output by around 273,000 barrels per day in the last six weeks following the latest campaign of militant violence.

LONDON, July 6 (Reuters)

Nigeria’s main militant group said on Sunday it had attacked three oil installations belonging to Royal Dutch Shellin the Niger Delta, widening a month-old offensive against Africa’s biggest energy industry.

“We’ve got weakening stock markets and the dollar is starting to strengthen,” said Rob Montefusco, a trader at Sucden Financial. “Also technically, it all broke down on Friday.”

U.S. crude for July , which expires later on Monday, fell $2.10 to $67.45 by 1414 GMT. It traded as low as $67.05 intraday, the lowest price since June 8. Brent crude slipped $1.88 to $67.31.

The World Bank warned on Monday prospects for the global economy remained “unusually uncertain” despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies.

Wall Street opened lower, European stocks lost ground and the dollar rose against a basket of other major currencies. A stronger dollar can limit the appeal of oil and commodities to investors.

Chart patterns are also pointing lower for crude. Both Brent and U.S. crude closed below the $70 mark on Friday, a bearish technical development. Even so, crude has more than doubled from a low of $32.40 in December.

Rebels in Nigeria have been carrying out attacks on the oil industry for years in what they claim is a struggle for a fairer share of the region’s energy wealth.

Also supporting the market was data showing China’s implied oil demand rose 6 percent in May over a year ago, its fastest growth since August 2008. China is the world’s second largest user of oil.

In the Middle East, Iranian opposition leader Mirhossein Mousavi urged supporters to continue protests over the re-election of President Mahmoud Ahmadinejad, in a direct challenge to the Islamic Republic’s leadership.

Some analysts say the political turmoil in Iran, a major oil exporter, so far is of limited significance for the markets due to high levels of unused production capacity and inventories. Others see it as supportive.

“The deterioration in the Iranian situation should prevent a sharper sell-off,” said Edward Meir, analyst at MF Global.

Crude oil speculators on the New York Mercantile Exchange slashed their net long positions nearly in half in the week to June 16, data showed on Friday. Long positions are bets that prices will rise.

LONDON, June 22 (Reuters)

Oil rose above $47 a barrel on Wednesday but the gains could be limited as further signs of weakening U.S. oil demand are expected to emerge in weekly data due out later in the session.

The market has fallen $100 a barrel from July’s record high of $147.27 to stand at a 3 1/2-year low, pressured by the gloomy economic outlook and after OPEC deferred a decision on whether to cut supplies until a Dec. 17 meeting.

U.S. crude rose 22 cents to $47.18 a barrel by 1020 GMT. It settled down $2.32 at $46.96 on Tuesday, the lowest settlement since May 2005. Brent crude gained 22 cents to $45.66.

“It’s a correction after yesterday’s fall,” said Christopher Bellew of Bache Commodities, referring to oil’s gain. “It’s coming at a surprising time because the data is supposed to show further builds.”

U.S. stocks data, to be released at 1535 GMT, are expected to show a 1.7 million-barrel rise in crude inventories for the week ended Nov. 28, the third consecutive week of increases, according to a Reuters poll.

Distillate stocks were forecast to show a 300,000-barrel increase while gasoline supplies could be up 900,000 barrels as demand probably fell, even with lower pump prices ahead of the Thanksgiving holiday, some analysts said.

Recession worries could have kept many Americans closer to home than usual this Thanksgiving, the American Automobile Association said.

The U.S. National Bureau of Economic Research said on Monday the current recession, in which the U.S. has been plunged for a year, could be the worst since World War Two.

Adding further pressure on prices, supplies appear to be falling more slowly than expected.

OPEC oil supply fell in November for a third consecutive month as members began to implement a deal to cut supplies in a move to halt the slide in oil prices, a Reuters survey showed on Tuesday.

But the survey suggested the Organization of the Petroleum Exporting Countries met only 66 percent of a pledge to lower output by 1.5 million barrels per day in November, less than analysts expected.

“We suspect that prices could move even lower from here, at least through to OPEC’s next meeting,” Edward Meir, analyst at MF Global, said in a report. “Many producers are simply not moving fast enough to rein in output.”

Alex Lawler, London, Maryelle Demongeot, Singapore

Dec 3 (Reuters)