Oil rose toward $76 a barrel on Thursday in its sixth straight session of gains after a government inventory report showed large drops in gasoline and distillate stocks, surprising the market.

U.S. crude for November delivery rose 58 cents to $75.76 a barrel by 1536 GMT (11:36 a.m. EDT), after climbing as high as $76.23, its highest since October 2008.

London Brent crude was up 39 cents at $73.49.

U.S. oil product inventories logged surprise falls last week as refiners curtailed operations, prompting a build in crude oil supplies, Energy Information Agency data showed on Thursday.

The market reacted favorably to the report. The draw in products due to the low refinery rated gave a bullish picture for the market which wants to go up anyway, said Mike Zarembski at OptionsXpress in Chicago.

Crude fell earlier in the session after data came out showing Goldman Sachs' quarterly earnings nearly quadrupled, but its shares fell on disappointment that so much of the profit came from trading gains that might not be sustainable.


Initial claims for state unemployment benefits in the United States fell unexpectedly by 10,000 to a seasonally adjusted 514,000 in the week ended October 10, the Labor Department said, the fifth such decline in the last six weeks.

The dollar was up against the yen and euro following the unemployment data, and the dollar index <.DXY>, which measures the dollar against a basket of currencies, climbed from a 14-month low to reach a session high of 75.765

Crude, up 1.8 percent on the year, is now in positive territory on a year-on-year basis for the first time since October 10, 2008. The six straight days of gains mark its longest winning streak since July.

Oil has marched in step with a recovery across markets, echoing rallies in equities, gold and base metals based on the view that economic recovery was gathering strength.

But traders and analysts remain wary that rising prices based on expectations of a revived economy are out of step with still fragile demand for oil.

There is currently no fundamental reason supporting a price rise and the path back to $100 per barrel will be a long and protracted one, analysts at JBC Energy in Vienna said in a note to clients.

Poor oil fundamentals, including 6 million b/d of OPEC spare capacity, a massive middle distillates stock surplus and terrible refining margins will keep the upside potential in check, JBC said.

(Editing by James Jukwey)