LONDON, Aug 24: Oil prices climbed towards $71 per barrel on Friday as strong US economic news restored confidence to a market which had been rattled by American housing sector woes.

The price of Brent North Sea crude for October delivery added 53 cents to $70.39 per barrel.New York’s main futures contract, light sweet crude for delivery in October, gained 81 cents to $70.64 per barrel.

Oil prices “rallied on the US durable goods report which has installed some degree of confidence back into the market,” said MF Global energy trading vice-president Bob Yawger.

“It’s the first big economic news that says the economy is doing well since the beginning of this credit crunch.

“Combined with the housing news, it means we don’t think there’s going to be a big change to the demand numbers for oil.”

Meanwhile, weak gasoline reserves in the United States underscored modest price gains on Friday, analysts said.

American gasoline or petrol reserves sank by 5.7 million barrels last week -- which was heavier than market expectations for a drop of 800,000 barrels.

Oil prices had fallen earlier on Friday as traders expressed relief that Hurricane Dean had spared vital energy installations in the US Gulf of Mexico.—AFP