Oil prices rose on Tuesday after data showed the U.S. economy grew at its fastest rate in 11 years, supporting expectations of greater demand for crude.
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Crude markets were also supported by expectations for lower U.S. inventories in preliminary data for the week to Dec. 19 due from the American Petroleum Institute (API).
But thinner-than-usual trading volume was likely to exaggerate any move higher or lower ahead of the Christmas and New Year holidays, analysts said.
The Commerce Department revised up its estimate of U.S. gross domestic product growth in the third quarter to a 5.0 percent annual pace, citing stronger consumer and business spending than it had previously assumed.
It was the fastest growth pace since the third quarter of 2003. Previously, the Commerce Department had pegged third-quarter growth at an annual rate of 3.9 percent. Economists polled by Reuters expected growth would be revised upwards to a 4.3 percent pace.
U.S. stocks surged on the data, with the Dow and S&P 500 building on a four-day rally to set new intraday records. [.N]
"The revised GDP growth of 5 percent is certainly encouraging demand expectations in the U.S. and giving crude some support," said Phil Flynn, analyst at Chicago's Price Futures Group.
"But since we also have API data today, and since volumes are thin heading into the holidays, I'll be wary of holding on to this relative strength till the close," he added.
U.S. commercial crude oil and products inventories were forecast to have fallen by 2.6 million barrels last week, according to a Reuters poll ahead of the API data at 4:30 p.m. ET. [EIA/S]
Benchmark Brent oil <LCOc1> was up $1.02 at $61.14 a barrel by 12:45 p.m. ET, after a session high at $61.49.
Brent has almost halved in value over the past six months as high quality crude from North America overwhelmed demand. It hit 5-1/2 year lows of $58.50 last week.
U.S. crude <CLc1> rose $1.34 to $56.60 a barrel after a session peak at $56.85.
Arab producers in OPEC expect oil to rebound to between $70 and $80 by the end of next year as a global economic recovery revives demand, OPEC delegates told Reuters this week.
(By Barani Krishnan; Additional reporting by Christopher Johnson and Henning Gloystein in Singapore; Editing by William Hardy, W Simon and David Gregorio)