Oil prices broke above $72 a barrel on Wednesday after a U.S. government report showed a bigger-than-expected decline in crude inventories.

NYMEX crude rose $1.58 to settle at $72.51 a barrel, adding to Tuesday's gain of $2.07, while ICE Brent rose $1.81 to $71.67.

The gain came after the U.S. Energy Information Administration reported that commercial crude oil inventories dipped last week by 4.7 million barrels, against expectations of a 2.4-million-barrel drop.

The decline, pegged to a slowdown in imports, came alongside builds in gasoline and distillate stocks -- a combination that analysts said could hurt the profitability of U.S. oil refiners.

Overall, we see this week's EIA report as bearish for products but bullish for crude, with refining margins under selling pressure as a result, said Tim Evans, energy analyst at Citi Futures Perspective in New York.

Other commodities and equities also rose strongly Wednesday, inspired by a comment from U.S. Federal Reserve Chairman Ben Bernanke that an economic recovery had begun -- a signal demand for raw materials may rebound.

The U.S. Commerce Department said retail sales climbed 2.7 percent in August after declining 0.2 percent in July. It was the biggest monthly advance since January 2006 and well above expectations on Wall Street for a 2 percent increase.

Oil also got a boost from weakness in the U.S. dollar, which hit a one-year low against a basket of currencies as investors turned to riskier assets.

Analysts have said a return of risk appetite is a key reason for recovery in oil price from a low of $32.40 in December -- the weakest in nearly five years -- to the August year-high of $75.

A weaker dollar can also fuel purchases of oil and other dollar-denominated commodities, as they become relatively less expensive to nondollar holding investors.

An OPEC delegate wrote in a Kuwaiti newspaper on Wednesday that the Organization of the Petroleum Exporting Countries might need to cut its oil supply next year to match an expected fall in demand for the group's crude.

(Additional reporting by Chris Baldwin, Barbara Lewis and David Sheppard in London; editing by Jim Marshall)