Oil climbs over $73 on hopes for rising demand

By Richard Valdmanis
NEW YORK (Reuters) - Oil prices extended a three-day rally to near $73 a barrel on Thursday on rising hopes the recession has bottomed out, spelling a recovery in ailing world energy demand.
The International Energy Agency said it revised its outlook for global oil demand higher for the first time since August, two days after the U.S. government's energy forecaster did the same.
"These revisions do not necessarily imply the beginnings of a global economic recovery, and may only signal the bottoming out of the recession," the Paris-based adviser to 28 industrialized nations said.
U.S. crude rose $1.50 to $72.83 a barrel by 1:00 p.m. EDT, the highest price since October 21. London Brent crude gained $1.07 to $71.87.
Olivier Jakob, oil analyst at Petromatrix, said markets were now in a phase of identifying green shoots of economic recovery. The IEA report "will likely be taken as an additional green shoot," he said.
Meanwhile, U.S. data showing an increase in retail sales in May and a slowdown in weekly jobless claims reinforced perceptions that the deterioration of the world's top economy was easing.
Wall Street rose after the data while the U.S. dollar lost ground against the euro.
Adding support to energy markets was data from China, the second-largest oil consumer, showing oil imports in May rose 5.5 percent from a year ago, the second-highest volume on record.
Oil prices have jumped nearly 7 percent in three days on expectations that a potential revival of the economy and continued OPEC production curbs would tighten up consumer stockpiles.
OPEC members have agreed to cut 4.2 million barrels per day of output since last autumn in an attempt to counter sliding prices and soft world demand.
Venezuela's oil minister, Rafael Ramirez, said on Thursday that the group should not consider increasing production until world oil stockpiles are reduced.
U.S. crude stocks fell by a sharp 4.4 million barrels last week due to sliding imports, but they remain about 19 percent higher than a year ago, the Energy Information Administration (EIA) reported on Wednesday.
(Additional reporting by Alex Lawler and Joe Brock in London, Pascal Fletcher in St. Kitts; Editing by David Gregorio)

Source: Reuters