The settlement for U.S. crude oil delivery for July went up $1.63 to $65.08 a barrel, the highest settlement since November 5th. London Brent crude rose $1.89 to settle at $64.39 a barrel.
The U.S. Energy Administration said U.S. crude stocks went down by 5.4 million barrels in the week to May 22, above analyst predictions for a 700,000-barrel decline, as refiners ramped up output ahead of the summer.
Analysts said while the data showed gasoline demand still below last year’s levels, it was looking stronger during the seven days leading into Memorial Day weekend, the traditional kick off for summer holiday travel.
"What we are seeing here is the demand side start to improve," said analyst Phil Flynn at Alaron Trading in Chicago.
"Gasoline demand over the Memorial Day weekend is a critical point in judging the health of the U.S. economy. I don't think the increased demand over the holiday was a fluke."
OPEC Secretary-General Abudullah al-Badri told Reuters Financial Television that U.S. demand was showing signs of recovering after the economic crisis battered global consumption and sent crude prices off record highs near $150 a barrel.
Betting a strengthening economy and signs of rising demand would support prices, OPEC ministers meeting in Vienna opted to leave target output levels unchanged.
Some members of the 12-member producer group voiced concern that high global inventories could bring down prices, but Saudi Arabian Oil Minister Ali al-Naimi said that rising demand would drain away excess supplies.
"The price is good. The market is in good shape. Recovery is under way. What else could we want?" he said.
U.S. stocks were on the rise on Thursday as the rise in oil prices buoyed energy shares and overshadowed mixed economic data.
