Oil rose to around $75 per barrel on Thursday, supported by firmer stock markets, U.S. jobless data and a report showing a fall in crude inventories in the United States, the world's biggest consumer.
Crude stocks fell by 4.96 million barrels last week, the Energy Information Administration report said, more than analysts expected , but less than the decline reported by the American Petroleum Institute (API) on Tuesday.
With the equity markets continuing to bounce along with the euro and risk appetite coming back to the table, today's data should reinforce the bullish short-term undertone for the energy complex, said Chris Jarvis at Caprock Risk Management in Hampton Falls, New Hampshire.
U.S. crude oil futures for August rose as much as $1.83 to $75.90 a barrel, the highest intraday price since June 30, and were up $1.08 at $75.15 by 1520 GMT. ICE Brent crude for August rose $1.04 to $74.55.
The EIA report released at 1500 GMT also showed gasoline inventories unexpectedly rose by 1.32 million barrels, while distillate stocks rose a less-than-expected 321,000 barrels.
Prices were up before the EIA report was issued as stock markets rose and the euro surged on optimism over the earnings season and growing tolerance for risk. .EU
U.S. stocks rose after data showed first-time claims for jobless benefits fell more than expected last week. .N
Oil prices in New York are still well below their 19-month peak above $87 reached in early May, although they have rebounded sharply from a trough below $65 on May 20.
Volatility has been falling for U.S. crude oil after spiking in May as front-month futures have traded around $75 per barrel, with 30-day volatility now below 30 percent, Reuters data show.
Commodities prices have made gains on a broad front thanks to friendlier equity markets, said Eugen Weinberg, commodity analyst at Commerzbank in Frankfurt. The API inventory data released yesterday evening gave additional support to prices.
The AP had said in a report late on Wednesday that U.S. crude oil inventories tumbled 7.3 million barrels last week, more than three times the expected drop.
A tropical depression has formed over the northwestern Gulf of Mexico and is heading toward the Texas-Mexico border, a region still recovering from Alex, the U.S. National Hurricane Center said.
A tropical storm warning was issued in the lower Rio Grande valley along the border, from south of Baffin Bay, Texas to Rio San Fernando, Mexico. The warning signaled the storm could make landfall within the next 24 hours. The expected course takes the weather system away from main oil-producing regions of the Gulf.
Other data was also supportive.
The International Monetary Fund raised its 2010 global growth forecast on Thursday, citing an expansion in Asia and in U.S. private demand. The IMF upgraded its 2010 global output growth forecast to 4.6 percent from 4.2 percent after a fall of 0.6 percent in 2009.
The IMF said a double-dip recession was unlikely.
On Wednesday, the EIA raised its 2010 world oil demand growth forecast by 60,000 barrels per day (bpd) from its previous estimate. The EIA now expects oil demand to climb by 1.56 million bpd in 2010 to 85.82 million bpd.
(Additional reporting by Alex Lawler in London and Alejandro Barbajosa in Singapore; editing by Sue Thomas)