Oil spikes to USD 70.85 a barrel

Oil rose in Asian trade but gains are being capped by concerns over a glut in global crude supples and weak energy demand, analysts said.

New York's main contract, light sweet crude for delivery in September, climbed 25 cents to USD 70.85 a barrel.

London's Brent North Sea crude for delivery in September was up 15 cents to USD 73.65.

Tony Nunan, an energy risk manager at Mitsubishi Corp in Tokyo, said prices are "having a hard time" rising well above USD 70 a barrel because global crude inventories are high.

"Most people feel that the USD 70 level has already built in an economic recovery by the end of the year," Nunan said.

"So the price probably got a little ahead of itself, especially considering the high worldwide inventory levels...

This is the reason why when the price goes up a little bit, it is sold again."

Nunan added that "we will probably see this trading range for a while."

Oil prices rose to historic highs of more than USD 147 a barrel in July last year.

They plummeted to near USD 30 in December after a financial and economic crisis in the United States escalated to affect other economies around the world and hit oil demand.