Oil at $71 a barrel, hits 9-month high

Oil hit a nine-month high above $71 (Rs 2876) on Thursday, a day after a report by the United Nations' nuclear agency opened the way to tougher sanctions against Iran.

Oil hit a nine-month high above $71 (Rs 2876) on Thursday, a day after a report by the United Nations' nuclear agency opened the way to tougher sanctions against Iran, the world's fourth-biggst crude exporter.

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London Brent crude, a more accurate indicator than US oil, was up 43 cents at $71.03 a barrel.

Prices steamed higher on Wednesday after US warships put on a show of force off Iran's coast, coinciding with a report by UN monitors that Tehran had expanded its nuclear programme.

"That played into the price action although the report had nothing new in it. It was a knee-jerk reaction to the headlines," said Mike Wittner of investment bank Calyon.

Lehman Brothers analyst Ed Morse doubted the U.S. exercises were a precursor to conflict. More probably they were designed to demonstrate U.S. willingness to defend the Strait of Hormuz, conduit for 40 percent of globally traded oil, he said.