Oil rises to near $72 as investors eye inflation

NEW YORK -- Oil rose to end the week higher as investors pumped money into the commodities market as a hedge against inflation.

Benchmark crude for July delivery added 55 cents to $71.92 a barrel in light trading Friday on the New York Mercantile Exchange, as the contract was set to close Monday. The August contract climbed 46 cents to $72.37 a barrel.

Money poured into oil markets all week as the dollar weakened against the euro.

While demand for energy remains weak, oil markets are attracting a lot of attention because crude can be used as a hedge against inflation.

Crude prices have doubled their value in three months, hitting a high for the year of $73.23 a barrel last week.

Meanwhile, retail gas prices in the U.S. rose for the 52nd straight day Friday.

Pump prices added a half cent overnight to a new national average of $2.69 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Pump prices could remain near the current level through the Fourth of July holiday weekend.

"Gas prices should back off a bit after that," said Phil Flynn, an analyst at Alaron Trading Corp. "However, you still have a wild card with oil. If crude keeps driving higher, then gas will too."

For the first time in a while, geopolitical events are also beginning to at least get some attention in oil markets.

In Nigeria, Africa's largest crude producer, a militant group said it blew up a major pipeline run by Italian oil company Agip. Violence has been escalating in the oil-rich southern region as the military intensifies operations to flush out rebels battling for a larger share of the Nigeria's oil revenues.

In Iran, protesters loyal to presidential candidate Mir Hossein Mousavi have been staging massive street rallies to protest what they believe to be a rigged election.

However, because of the recession, there's so much extra oil production capacity around the world that experts say a drop in Iranian or Nigerian exports won't lead to any price spikes.

In other Nymex trading, gasoline for July delivery fell 2.49 cents to $2.0046 a gallon and heating oil rose less than a penny to $1.845 a gallon. Natural gas for July delivery lost a penny to $4.083 per 1,000 cubic feet.

In London, Brent prices rose 37 cents to $71.43 a barrel on the ICE Futures exchange.