Oil prices rose on Thursday after a U.S. government report showed a surprise decline in stockpiles in the world's largest energy consumer, and OPEC said it would maintain official output curbs.
U.S. crude rose 40 cents to $71.71 a barrel by 12:55 p.m. EDT while London Brent rose 8 cents to $69.91.
The gains came after data from the U.S. Energy Information Administration (EIA) showed crude inventories in the United States fell a larger-than-expected 5.9 million barrels as imports slowed and refiners raised run rates.
The EIA report also showed U.S. petroleum product demand running at 2 percent higher than a year ago -- a sign the slump in consumption caused by the recession may be petering out.
Analysts said, however, that the bullish impact of the report was tempered by increases in stockpiles of gasoline and distillates like diesel and jet fuel.
While the crude numbers are supportive, the product builds are limiting any gains on crude at this point, said Phil Flynn, analyst at PFGbest Research in Chicago.
Earlier on Thursday, the International Energy Agency (IEA) said daily global oil demand will be almost half a million barrels higher than previously forecast this year and next on stronger-than-expected U.S. and Asian consumption.
The year-on-year decline will diminish as we go through the end of 2009, and then from early 2010, we will begin to see year-on-year growth in global demand, said David Fyfe, head of the IEA's oil industry and market division.
Oil prices sank toward $30 a barrel this winter as global energy demand shrank for the first time in a quarter century.
The Organization of the Petroleum Exporting Countries, meeting in Vienna, said it saw no need to change output formally, although some members called for stricter compliance on existing curbs.
Ali al-Naimi, the oil minister of Saudi Arabia, said oil prices were being driven by economic recovery.
The lack of more aggressive action reflected a belief that demand will be sufficient in pulling down the overhang in the market, David Kirsch, director of market intelligence services at PFC Energy in Washington, said.
(Additional reporting by Nick Trevethan in Singapore and Ikuko Kurahone in London; Editing by Marguerita Choy)