Oil rose on Thursday after better than expected euro zone manufacturing and services data, but rising U.S. oil inventories and fears about the broader U.S. economy, the world's largest, kept prices in check.

The euro zone's private sector surged this month, according to a survey released on Thursday, reassuring markets spooked by U.S. Federal Reserve Chairman Ben Bernanke describing the prospects for the United States as unusually uncertain.

Germany, the EU's biggest economy, saw its services sector grow at its fastest pace in almost three years, and its manufacturing sector grew at a pace not far off April's 14-year survey high.

I think that this is a very good sign that we are not heading for a double-dip recession, Dekabank analyst Sebastian Wanke told Reuters Insider.


U.S. crude stockpiles rose 360,000 barrels in the week to July 16, government statistics from the Energy Information Administration showed on Wednesday, against a forecast for a drop of 1.4 million barrels.

Rising crude imports helped offset an increase in refinery capacity utilization. Higher refinery use boosted gasoline inventories by 1.1 million barrels, slightly more than a forecast gain of 900,000 barrels.

Distillate stocks jumped by 3.9 million barrels, more than double the expected rise.

Shell Oil Co (RDSa.L) began pulling nonessential workers from eastern Gulf of Mexico oil and natural gas operations on Wednesday due to the threat of a possible tropical storm that may emerge by the weekend, the company said.

But an updated forecast that cut the chances of a storm developing dampened crude price rises.

The U.S. National Hurricane Center said on Thursday a weather system hovering over the Bahamas, eastern Cuba and Hispaniola had a 40 percent chance of becoming a tropical cyclone in the next two days, down from as high as 70 percent on Wednesday.

Storms in the region can follow a westward path toward the oil-rich Gulf of Mexico.

It is possible that some supply disruption due to a hurricane would be a supportive factor, Hasegawa said.

(Additional reporting by Alejandro Barbajosa in Singapore; editing by Sue Thomas)