Oil rose toward $72 a barrel on Thursday as the dollar weakened, and bullish data on China and U.S. crude inventories helped lift sentiment.
The greenback fell against major currencies <.DXY> toward lows struck the previous day after tame U.S. inflation data dampened speculation the Federal Reserve would raise interest rates by year-end.
China oil data provided added support for oil prices, with May diesel exports falling to 390,000 tonnes after hitting a record 510,000 tonnes in April, as oil firms kept more fuel at home on rising sales and falling stockpiles.
U.S. crude rose 62 cents to $71.65 a barrel by 0719 GMT, while Brent crude gained 54 cents to $71.39.
Recently, the oil market is looking more at the correlation between the euro and the dollar, said Ryuichi Sato, an analyst at Tokyo-based Mizuho Corporate Bank.
A weaker dollar makes oil and other commodities cheaper for holders of other currencies.
Many analysts, including Sato, are eyeing a key price target of $76 a barrel, established last year when oil tumbled from the record above $147 hit in July.
The bullish Chinese customs data came as the World Bank raised its forecast for gross domestic product growth this year for the world's third-largest economy to 7.2 percent from the 6.5 percent projected in its previous quarterly report in March.
The World Bank said a massive policy stimulus should enable China to keep growing at a respectable rate this year and the next, but a robust recovery was unlikely given global weakness and softness in non-government investment.
In another positive sign for oil, the U.S. Energy Information Administration reported a much higher than expected fall in crude stockpiles in the week to June 12, by 3.9 million barrels.
Gasoline demand in the world's top consumer, which has been battered by the economic crisis, rose over the four-week period ending last week, further lifting oil prices.
Slumping demand that drove oil off its July peak prompted OPEC last year to agree to a series of production cuts to prop up prices.
Prices have since more than doubled from the lows near $32 touched late last year on hopes that the economic crisis may soon find a bottom and fuel demand will start to recover.
Qatari Oil Minister Abdullah al-Attiyah told Reuters price gains in recent months were due to speculators more than fundamentals.
Lending support to oil prices on Wednesday, he said OPEC was unlikely to increase output soon despite concerns from some analysts that higher fuel costs could stall any global economic recovery.
(Reporting by Chua Baizhen; Editing by Clarence Fernandez)