Oil above 72 dollars in Asian trade

SINGAPORE: Oil prices fell in Asian trade Friday but stayed above 72 dollars a barrel as signs of an economic recovery continued to be weighed down by weak energy demand.

New York's main contract, light sweet crude for delivery in October, was down 30 cents to 72.61 dollars a barrel in morning trade.

Brent North Sea crude for October delivery shed 21 cents to 73.12 dollars.

US data released Wednesday showing an unexpected drop in crude stockpiles meant demand was improving, and prevented prices from sliding further, analysts said.

But global crude reserves are still robust, keeping a lid on further price rises, analysts said.

The US inventory report "remained a supportive factor but oil prices struggled to make further gains," the Commonwealth Bank of Australia said in a report.

US crude inventories fell a massive 8.4 million barrels last week, snapping a three-week run of gains and taking traders completely by surprise, having expected an increase of 1.5 million barrels.

Analysts said the market needs more sustained evidence of an economic rebound before prices firm up.

"It does not constitute a new trend, while more stock draws are needed to cement a demand recovery," said VTB Capital analyst Andrey Kryuchenkov.

In July last year oil prices hit record peaks above 147 dollars a barrel before collapsing to hit 32 dollars in December due to weak energy demand arising from the effects of the world financial crisis.