I've had a few friends who were like that.
When he has his Zippo near your clothes, reach up and take it out of his hand (he won't expect it so you'll grab it easily, just don't burn yourself!). Calmly close the lid and look at him and say assertively, but not aggressively, "Just give it a rest". He's getting a reaction out of you (and Lunchbox is 100% right about him wanting attention and being the big cheese!) so if you just say to him flat out "Give it a rest" or "Come on man, just fuck off"
If you act bored he'll sense it and do more to get a rise out of you. If you get really angry your friends might be a bit freaked out. If you just walk away you lose your friends for that time being and he wins. If you put up with it he is getting that satisfaction.
Best thing to do is to assertively say 'Give it a rest'. Say that, look at his eyes for a second, and then turn back to your friends or talking or doing whatever it is that you were doing before. I think that exact phrase would work best - it shows you've let him have his fun and now it's a bit childish, and I bet you a dollar he'll feel pretty dumb as soon as you say that.
Sorry for the long and rambling response, I tend to do that
