U.S. oil prices rose Thursday, tracking a late-day rebound on Wall Street and bolstered by a report showing strong economic growth in China, the world's second biggest consumer of energy.
U.S. benchmark crude for August delivery rose 48 cents (U.S.) to settle at $62.02 a barrel, while London Brent eased 34 cents to $62.75 a barrel ahead of the August contract's expiry.
The gains, which added to Wednesday's rally of more than $2 triggered by a U.S. report showing sliding domestic crude inventories, coincided with an afternoon bounce on Wall Street driven by technology shares.
"Another late rally and coinciding with an S&P 500 rally, although it's arguable who's watching whom more closely," said Tim Evans, analyst at Citi Futures Perspective in New York.
Oil prices have tracked equities closely in recent months as dealers look to stock markets for signs of optimism about the economy that could eventually spell a rebound in energy consumption.
The oil market had gotten some support from news that China experienced surprisingly strong economic growth of 7.9 per cent in the second quarter, fuelled by state spending and bank lending.
Oil prices remain down nearly $10 since early July amid lingering concerns about global energy demand, which has been contracting for the first time in a quarter century under the weight of the economic recession.
The global slowdown has cut world oil demand by as much as 2.5 million barrels per day, according to the International Energy Agency.
In the United States, data showed new jobless claims fell to their lowest level since January, but the Labour Department noted that an unusual pattern in automotive layoffs had amplified the drop.
Also highlighting the ongoing problems facing the world economy is the looming bankruptcy of CIT Group Inc., a lender to hundreds of thousands of small and mid-sized U.S. businesses, after bailout talks with the U.S. government fell apart.
Meanwhile, U.S. retail gasoline prices fell 1.2 cents to a new national average of $2.492 a gallon Thursday, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gas is 18.2 cents cheaper than a month ago and $1.622 cheaper than last year.
Natural gas prices surged nearly 12 per cent even though the government reported that stockpiles remained well above their five-year average. The build for the week ended July 10 was at the lower end of expectations, but analysts said that didn't justify such a huge jump in prices.
Instead, they suggested that speculators, including companies and hedge funds that buy energy commodities, were likely repositioning themselves in the market.
Natural gas for August delivery jumped 38.5 cents to settle at $3.668 per 1,000 cubic feet.
In other Nymex trading, gasoline for August delivery added less than a penny to settle at $1.7135 a gallon, and heating oil for August delivery climbed 1.73 cents to settle at $1.5994 a gallon.
With files from The Associated Press