Oil prices increased over 4% on Thursday following a rally in global equity markets as well as a drop in US crude stockpiles.

Front-month Brent rose $1.75 at $44.89 a barrel, while US crude edged up $1.60 t $40.20 a barrel, Reuters reported.

Stock markets rallied due to a recovery in Chinese shares on expectations that government initiatives to stimulate the economy may succeed.

"The trend is strong and down. However, do not be wrong footed by a correction higher."

PVM Oil Associates technical analyst Robin Bieber told the news agency: "The trend is strong and down. However, do not be wrong footed by a correction higher."

Data published on Wednesday on US stockpiles highlighted a 5.5 million barrels fall in crude inventories in the week ending 21 August, backing oil prices.

Analysts a expected 1 million barrel increase, and some of them said the drop may be connected to weak import figures for last week.

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Standard Chartered reduced its Brent forecast for 2015 by $10 a barrel to $54, in addition to slashing its Brent forecast for next year by $20 to $63.