OIL extended gains above US$70 (S$102) a barrel in Asian trade on Friday as attacks on pipelines in crude producer Nigeria escalated and the US dollar wobbled from a recent rally, analysts said.

In morning trade, New York's main futures contract, light sweet crude for delivery in August, climbed 24 cents to US$70.47 a barrel.

Brent North Sea crude for August was up 35 cents to US$70.13.

Nigerian rebels on Thursday said they carried out a pre-dawn attack against Royal Dutch Shell facilities in a warning to Russia not to invest in the country's oil and gas industry.

Other analysts said oil prices also had support from a weaker US dollar, which rallied briefly after a US central bank announcement Wednesday that it will maintain its monetary policy and keep interest rates at near zero.

The Fed's action helped lift the stock market and encouraged riskier market bets, which staunched the dollar rally.

A weaker dollar makes dollar-priced oil cheaper to holders of stronger currencies, encouraging demand and leading to higher prices.

Singapore's DBS Bank said however that governments would not like to see the US dollar collapse because of its influence on international trade.

'As far as Asian policymakers are concerned, shifting the economy's reliance towards domestic demand away from exports is not a structural change that can be achieved overnight,' it said in a research note.

'Hence, they have been reluctant to let the US dollar fall below the post-crisis consolidative ranges against their currencies.' Industrialised countries also feel it is not the right time for the dollar to further depreciate, DBS said.

Many monetary policymakers 'believe that the market has swung from excessive pessimism to excessive optimism,' the bank said. -- AFP