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PERTH - Oil rose to a new six-month high above $65 a barrel on Friday, on track for its largest monthly percentage gain in more than a decade, after government data showed a surprisingly sharp drop in U.S. crude inventories and OPEC left output steady.

Oil prices have jumped 28 percent this month, buoyed by hopes of a global economic recovery later this year and a bullish price outlook from OPEC kingpin Saudi Arabia.

U.S. crude oil for July delivery rose 48 cents to $65.60 a barrel by 3:00 a.m. EDT, after earlier touching $65.70, a level unseen since November 5. The contract, which has risen about 5 percent this week, settled up 2.6 percent at $65.08 on Thursday.

London Brent crude gained 34 cents to $64.73.

"The market seems to be focusing strongly on the bullish sentiment and the brighter macroeconomic outlook, but it's a little doubtful whether the demand fundamentals can continue to support oil prices at such levels," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.

Signs of an uptick in demand are emerging in the United States and Japan after the sharpest downturn in decades, prompting companies to revive production and investors to buy shares, despite lingering concerns over mounting Western government debt.

Another bright spot was U.S. crude stocks, which fell by 5.4 million barrels in the week to May 22, the U.S. Energy Administration said, way above analysts' expectations in a Reuters poll for a 700,000 barrel decline, as refiners ramped up output ahead of the summer driving season.

Gasoline inventories also dropped for the fifth week in a row as demand rose in the week preceding the Memorial Day holiday, which traditionally marks the start of the summer driving season in the U.S.

OPEC's decision to hold production steady helped prop up prices.

The producer group on Thursday kept its output targets unchanged as the market had expected, betting on a strengthening world economy and tentative signs of increased demand.