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NEW YORK: Oil prices rose for a seventh straight session on Friday, fuelled by a jump in industrial production in the United States, the world's biggest energy consumer, and rising tensions in oil-rich Nigeria.
New York's main contract, light sweet crude for November delivery, rose 95 cents to end the week at 78.53 dollars a barrel - the highest level since October 2008.
The contract has gained more than nine dollars or almost 13 percent during its seven days of rise.
London's Brent North Sea crude for December delivery meanwhile climb 76 cents to close at 76.99 dollars.
"The key factor driving this market right now is economic expectations," said analyst Jason Schenker of Prestige Economics. "Today the industrial production data drove up prices."
US industrial production jumped in September for a third straight month, the Federal Reserve reported Thursday in a further sign of a reviving manufacturing sector.
Output at the nation's factories, mines and utilities rose 0.7 percent after an upwardly revised gain of 1.2 percent in August, the US central bank said in a report.
It marked the first period of sustained increase since 2007, when the United States plunged into recession.
Most economists had forecast a 0.2 percent rise in September.
For the third quarter as a whole, output advanced at an annual rate of 5.2 percent, the first quarterly gain since the first quarter of 2008 and the largest gain since the first quarter of 2005, the Fed said.
Another factor for the bullish market Friday was the surprise drop in gasoline stocks in the United States, indicating rising demand fuelled by hopes of economic recovery, analysts said.
A government report on Thursday showed US gasoline stocks fell 5.2 million barrels last week. Analysts had expected a rise of 700,000 barrels.
US crude reserves meanwhile rose 400,000 barrels last week, lower than most analysts' expectations for a gain of 600,000 barrels.
Warnings by Nigerian rebels of a resumption of an "oil war" also rattled the market.
A rebel group that has wreaked havoc in Nigeria's oil hub on Friday ended a 90-day ceasefire, warning the oil industry and military to brace for new and widened attacks.
The Movement for the Emancipation of the Niger Delta (MEND), which has waged a three-year campaign for a bigger share of the oil wealth for the impoverished local population, said it will take up arms again after it shunned a government amnesty offer.
MEND's violent attacks have severely cut daily production in the world's eighth largest oil exporter - by up to a third of pre-2006 levels.
Oil prices tumbled from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December because of the global recession but have since risen on recovery hopes. - AFP/de
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