Oil up for 5th day, above $72

SINGAPORE: Crude oil edged higher on Friday to just above $72 a barrel, on course for its first weekly rise since mid-August, supported by a softer dollar and gains in equities.

Equities markets rose around half a percent in Asia, off early highs, which stripped some support from energy. In the past two months equities and oil have shown a very tight correlation.

A slide in the dollar to a one-year low against a basket of currencies after Chinese data came in stronger than expected lent strength.

The weakening greenback -- down 2 percent this week -- has driven buying in dollar denominated assets like oil, but David Moore, a commodities economist at Commonwealth Bank of Australia said although further dollar weakness was likely, it would have a less pronounced influence on prices.

"Our forecast for currencies is for dollar depreciation -- a lot of that has occurred already and while depreciation has been an upside driver, that influence may be weakening," Moore said.

NYMEX crude for October delivery stood at $72.05 a barrel by 0329 GMT, up 11 cents from Thursday's settlement. Oil earlier touched $72.38 and prices are on track for the biggest weekly rise since the middle of August.

London Brent crude rose 28 cents to $70.14 a barrel. TOP OF THE RANGE China's crude oil imports in August surged about 25 percent on the year to 19.6 million tonnes, near a record high, or around 4.6 million barrels per day, Reuters calculations based on official customs data showed.

Imports for the first eight months rose 7.4 percent on year to 130 million tonnes.

The International Energy Agency raised its demand outlook and the U.S. Energy Information Administration reported crude inventories fell 5.9 million barrels last week, four times greater than forecast in a Reuters poll.

"A lot of the information that came out on Thursday was pretty bullish for oil but the price reaction was muted," CBA;s Moore said.

"That is probably because we are back towards the higher end of the trading range and it's making making people a bit cautious," he said.

More gains in crude could be on the cards, with a possible challenge of the late August high of $75 a barrel, said Peter McGuire, managing director of Commodity Warrants Australia, saying this is a level OPEC would be happy with.

"OPEC wants to see oil between $70 and $85, and what OPEC wants, OPEC gets. If you want to play ball they are the only game in town and remember they own the pitch, the bat, the ball, the umpire and even the hotdog concession,"

OPEC left output unchanged after a meeting that ended late Wednesday, but signalled it would push for greater compliance with the 4.2 million barrels per day that the group had agreed at a series of meetings previously.