Oil rose towards $71 a barrel on Thursday as a surprising return to economic growth in France and Germany fed optimism the world was through the worst of the recession, offseting bearish US inventory data. Gross domestic product (GDP) in the euro zone's two biggest economies rose by 0.3 percent each in the second quarter against expectations for a decline of 0.3 percent.
The unexpected bullish news fuelled sentiment that the worst was over after the US Federal Reserve said on Wednesday the US economy was showing signs of levelling out two years after the onset of the deepest financial crisis in decades.
Japan's Nikkei index settled up 0.79 percent while Asian stocks outside of Japan gained 2.18 percent by 0649 GMT. US light crude for September delivery rose 80 cents to $70.96 a barrel by 0650 GMT, having gained 1 percent on Wednesday to settle at $70.16, ending a four-day losing streak.
London Brent crude gained 98 cents to $73.87, having earlier risen by $1.01 to $73.90. Forecasts that an oil demand recovery is at hand led traders to shrug off bearish weekly stock data on Wednesday. The Energy Information Administration reported a much larger-than-expected rise of 2.5 million barrels in US stockpiles and in distillates stocks, which gained 800,000 barrels and a lower-than forecast 1 million draw in gasoline stocks.
Demand for gasoline and distillates also fell last week, the EIA data showed. Tropical storms and hurricanes can disrupt the operations of offshore oil platforms and coastal refineries.
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