Oil rose more than 11 percent to top $46 a barrel on Thursday following better-than-expected U.S. February retail sales data and ahead of a weekend OPEC meeting.
A report showed sales at U.S. retailers eased a smaller than expected 0.1 percent in February after a surprise gain in the month before, a hint spending could be stabilizing.
All the underpinnings of a decent rally are falling into place. Gasoline's fundamentals are strong, retail sales today were better than expected, said Chris Jarvis, senior analyst with Caprock Risk Management.
The U.S. retail sales numbers included a 3.4 percent rise in gasoline sales, the biggest rise since 2007, after increasing by 2.8 percent in January. The U.S. stock market rose for a third straight day, helped by the reassuring February retail sales report.
Data from No. 2 oil consumer China was mixed, showing industrial output growth slowed to a record low at the start of the year, weighing on global markets.
However, a reported showed a continued surge in bank lending in China in February fed optimism that economic activity could soon rebound.
The slumping global economy has damped global oil demand, sending crude oil prices down from record highs over $147 a barrel hit in July and prompting OPEC to agree a series of deep production cuts in the second half of last year.
The producer group next meets on Sunday to agree on output policy and is widely expected to talk about stricter compliance with its existing output cuts rather than further reductions.
Libya said it would go along with another production cut if needed, but added the group must first address compliance.
Saudi Arabia, the biggest and most influential of the 12-member group, is among those that believe it is too soon to agree new output targets, sources have said.
Some members, however, such as Iraq and Kuwait, have said an additional cut might be necessary.
UK consultancy Oil Movements said OPEC seaborne oil exports, excluding Angola and Ecuador, will fall to a five-year low in the four weeks to March 28.
Oil Movements shows OPEC output down another 350,000 bpd in latest week and that didn't hurt the bulls, said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
(Additional reporting by Matthew Robinson, Robert Gibbons and Gene Ramos in New York; Maryelle Demongeot in Singapore and Ikuko Kao in London; Editing by Christian Wiessner)