Oil rises to $72 as IEA raises demand outlook

By Alex Lawler
LONDON (Reuters) - Oil firmed to $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 said as it raised its 2009 forecast for the first time since August 2008.
"Markets are currently in a phase of identifying green or bamboo shoots," and the IEA report "will likely be taken as an additional green shoot," said Olivier Jakob, oil analyst at Petromatrix.
U.S. crude rose 71 cents to $72.04 a barrel by 1105 GMT (7:05 a.m. EDT), a near eight-month high. Brent crude gained 50 cents to $71.30.
Falling inventories in top oil consumer the United States also supported prices.
U.S. 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 percent over the four-week period, the start of the U.S. 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.
Data from China, the second-largest oil consumer, suggested rising demand.
China's crude imports in May rose 5.5 percent from a year ago, the second-highest volume on record, the General Administration of Customs said on Thursday.
The U.S. dollar fell again against a basket of currencies on Thursday, adding support to dollar-denominated commodities.
(Additional reporting by Maryelle Demongeot in Singapore; Editing by James Jukwey))

Source: Reuters