Oil prices bounced back from a seven-week low, Bloomberg reported.

Crude oil for August 2009 delivery rose as much as $0.72, or 1.2%, to $60.86 a barrel on the New York Mercantile Exchange, and traded at $60.72 at 11.46am Singapore time. Prices dropped as low as $60.01 on 8 July before closing at $60.14 a barrel, the lowest settlement since 19 May.

Oil broke a six-day decline as market participants bought on the assumption that prices would go higher after falling 15% since 29 June.

The International Monetary Fund (IMF) said yesterday that a rebound in the global economy next year would be stronger than it predicted in April 2009, suggesting energy demand may improve.

The IMF said in a revised forecast that the world economy will expand 2.5% next year, compared with its April 2009 projection of 1.9% growth. A contraction this year will be 1.4%, worse than an April 2009 forecast for a 1.3% drop, the IMF said.

A US Energy Department report showed that US oil inventories fell 2.9 million barrels to 347.3 million last week, the lowest since January 2009. Refineries operated at 86.8% of capacity, down 0.2 percentage points from the preceding week.

The Energy Department said that gasoline stockpiles went up 1.9 million barrels to 213.1 million in the week ended 3 July, more than twice the rise forecast in a Bloomberg News survey. Motor fuel inventories were forecast to augment 900,000 barrels last week, according to the median of 16 responses in a Bloomberg News survey.

Gasoline for August 2009 delivery gained as much as 2.47 cents, or 1.5%, to $1.6580 a gallon in New York. Yesterday, it dropped 5.7% to settle at $1.6333.