London: Oil firmed above $72 a barrel on Thursday after the International Energy Agency raised its estimate for 2009 oil demand, adding to signs the fall in consumption may have bottomed out.
World oil demand will contract by less than previously expected this year, the International Energy Agency, which advises 28 industrialised countries, said as it raised its 2009 forecast for the first time in almost a year.
“These revisions do not necessarily imply the beginnings of a global economic recovery, and may only signal the bottoming out of the recession,” it said in its monthly Oil Market Report.
US crude rose 88 cents to $72.21 a barrel by 1:35pm, a near eight-month high. Brent crude gained 70 cents to $71.50.
Falling inventories in top oil consumer the United States also supported prices.
US crude stocks fell by a sharp 4.4 million barrels last week, against expectations for a modest draw of 400,000 barrels, while products inventories also dropped, the Energy Information Administration (EIA) reported on Wednesday.
Gasoline inventories fell 1.6 million barrels last week against forecasts for a 800,000-barrel build as gasoline demand rose by 0.4% over the four-week period, the start of the US summer driving season, the EIA said.
Distillate stocks, including diesel and heating oil, fell by 300,000 barrels, versus analysts expectations for a 1.4 million barrel increase.
The US dollar fell again against a basket of currencies on Thursday, adding support to dollar-denominated commodities.