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t style="color: black;">By Chika Amanze-Nwachuku with agency report, 06.12.2009

Investors' optimism about a global economic recovery continued to push crude to fresh highs  as price rallied above $72 a barrel yesterday.

Also, the International Energy Agency (IEA) added  to investors' confidence, forecasting that the slump in global oil demand in 2009 would  be slightly less severe than previously expected.

The IEA, an advisory body for 28 industrialised countries in its monthly oil-market report said it expects  global crude demand this year to average 83.3 million barrels a day representing an increase of 120,000 barrels a day from its May estimate.

A Reuters report yesterday showed that U.S. crude rose 88 cents to $72.21 a barrel by 0905 GMT, a near eight-month high. Brent crude gained 70 cents to $71.50.

The report added that falling inventories in top oil consumer, the United States also supported prices. U.S. crude stocks fell by a sharp 4.4 million barrels last week, against expectations for a modest  draw of 400,000 barrels, while products inventories also dropped, the EIA reported on Wednesday.

The global financial meltdown, which eroded oil demand had reduced oil to $32.40 late last year, after price had risen above $147 a barrel in July.

However, oil prices had  hovered around $40 in the early part of the year, until on March 9, when it hit new highs of $52.25 a barrel,  after a decision by the Federal Reserve to spend billions snapping up U.S. bonds sent the dollar tumbling.  But Crude soared above $71 a barrel on Wednesday, after settling above $70 on Tuesday, the first time in seven months.

Organisation of Petroleum Exporting Countries (OPEC) had in the wake of the record oil plunge noted that its revenue had been adversely affected, a development which prompted members countries to set back 35 of the 150 projects due to come on line in the next few years to expand supply.

OPEC Secretary General, Abdalla El-Badri , had stated that falling prices of crude oil would not only affect investments in both the upstream and downstream, but will delay future investments.

He raised fears that if the present situation does not change, it will lead to cancellation of future investments and automatically affect oil supply to the market.Following the recent price rally, OPEC at its May 28 meeting agreed to leave outputs at their present levels. Lead producer, Saudi Arabia had predicted that oil prices would likely rise to around $75 a barrel by the end of the year on the back of growing demand in Asia .

OPEC President, Angola 's Oil Minister, Botelho de Vasconcelos had noted that oil should be between $70 and $75 a barrel to cover the costs of production.OPEC's Director of Research, Hasan Qabazard , had at an Energy conference a fortnight ago expressed fears that oil prices could fall again because fundamentals were still weak.The OPEC scribe had noted that oil markets were still weak, pointing out that the current price 'rally may be unsustainable in the short term because the 'rally is driven by funds rather than fundamentals”.  However, United States investment bank, Goldman Sachs had stated that a potential economic rebound alongside production cuts by the OPEC could prop up price to $85 a barrel by the end of the year and $95 a barrel by the end of 2010.