Oil spikes to USD 71.05 a barrel

Brent North Sea crude for January delivery was up 42 cents to USD 72.81.

Investors were snapping up oil as crude prices headed south in recent sessions,analysts said.

8220;You probably have a lot of financial players viewing a dip in oil prices as an opportunity to put more money back into oil,8221; said Jason Feer,Asia-Pacific vice-president of energy analysts Argus Media in Singapore.

However,oil markets were still reeling from a dearth of energy demand as evinced by data released by the US Department of Energy DoE Tuesday,Feer cautioned.

The DoE report showed distillate inventories increasing by an unexpected 1.6 million barrels for the week ended December 4,against analyst predictions of a 5,00,000-barrel fall.

Calling the data 8220;bearish,8221; Feer said a gain in US distillate stocks at this time of year was symptomatic of weak energy demand,and offset a 3.8 million fall in crude stockpiles.