Oil extends gains towards $75 in Europe

Extending gains from Asian trade, oil prices climbed towards the $75 a barrel mark in early afternoon European trade on increased demand for energy.

Light sweet crude for October delivery was seen trading at $74.98 a barrel by noon in London time while Brent crude was down slightly at $78.10 on the ICE Futures exchange.

Analysts said the black gold took advantage of a more than expected drop in US crude inventories and the shortage may push up demand.

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Meanwhile markets are also awaiting the outcome of US Energy Department's Energy Information Administration report, its weekly supply data due later Thursday.

The Energy Department said Wednesday it expects the December contract to settle at $78 a barrel and the December 2011 contract to settle at $84 as a jump in demand from China helps offset slowing growth in developed countries.

China will likely consume an average of 9.5 million barrels a day next year, up 46 percent from 2002, the department said.

The Organization of Petroleum Exporting Countries, OPEC, made a downward revision of 100,000 barrels a day of demand for its crude this year to 28.6 million barrels a day.

In its monthly oil market report, the Vienna-based group also saw 2011 demand for its crude down by 100,000 barrels a day to a daily 28.8 million barrels, 0.2 million barrels higher than in 2010.

For global oil demand, OPEC expects growth of 1 million barrels a day both in 2010 and 2011.

In other Nymex trading in October contracts, heating oil rose 0.96 cent to $2.0913 a gallon and gasoline gained 0.81 cent to $1.9475 a gallon. Natural gas for October delivery advanced 1.2 cents to $3.826 per 1,000 cubic feet.