LONDON—Oil rebounded on Thursday, boosted by a weaker U.S. dollar and comments from OPEC's president Chakib Khelil that prices could rise as high as $170 in coming months.
U.S. crude was up $3.28 at $137.83 a barrel by 1451 GMT. London Brent crude was up $3.13 at $137.46.
On Wednesday oil fell more than $5 after U.S. weekly oil data showed a drop in gasoline demand and an unexpected rise in crude oil inventories.
Oil trimmed these losses later on Wednesday to settle $2.45 down as the dollar fell versus the euro due to the Federal Reserve's decision to hold key interest rates steady and gave few clues on future direction of rates.
The weaker dollar helped prices rebound on Thursday as well as Khelil's comments in an interview on France 24 television.
"I forecast prices probably between $150-$170 during this summer. That will perhaps ease towards the end of the year."
Oil has risen about 40 percent this year to a record of nearly $140 a barrel, boosted partly by the weak dollar and expectations strong demand growth from China and India could tighten supplies in the long term.
But there is some evidence that high prices are having an impact on consumption.
The market continues to watch U.S. economic indicators for signs of faltering demand.
"On a four-week average basis, U.S. total product demand is down 680,000 barrels a day (3.2 percent) versus a year ago," Lehman Brothers said in a research note.
"With demand in the rest of the world outside the U.S. growing just 1.2 million b/d and with potential for even lower growth as the removal of subsidies in Asian countries takes effect...the global demand picture could be rapidly approaching zero growth."
Analysts also said instability in Nigeria will continue to support oil prices.
A Nigerian oil workers union and Chevron are expected to resume talks on Thursday in a last-ditch effort to avert an all-out strike that could sharply cut output from the world's eighth largest exporter.
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