NEW YORK (TheStreet) -- Oil prices were roaring Thursday morning on bullish inventory and analyst reports and upbeat economic news.

West Texas Intermediate (WTI) light sweet crude oil for August delivery was spiking by $2.22 to $98.87 a barrel, while the September Brent crude contract was gaining $2.84 to $116.07, despite a weaker euro and stronger dollar.

The American Petroleum Institute (API) on Wednesday reported a big weekly decline in crude stockpiles, with inventories falling 3.2 million barrels in the week ended Jul.1. Gasoline supplies fell 2 million barrels and distillate stocks declines 1.6 million barrels. Refiners reduced utilization 0.2 percentage points to 86.30% capacity.

"Whereas the decline in crude stocks can be explained by lower imports, the decline in oil products suggests a rise in demand," says Carsten Fritsch, Commerzbank commodity research analyst.

If the Department of Energy's corresponding weekly inventory report confirms the API report, set to be released at 11 am ET, the market should respond enthusiastically. "They too are expected to show a decline in crude inventories, but will probably give a much smaller decline in gasoline stocks, while an increase in distillate stocks is expected," says Fritsch.

The API data preceded a spate of upbeat economic news and bullish oil reports from

Morgan Stanley


Goldman Sachs.

Morgan Stanley analysts reiterate their bullish view on oil, particularly in the second half of 2011. "We expect inventory draws will prompt OPEC (Organization of the Petroleum Exporting Countries) to increase production, at the expense of spare capacity," the analysts said in a client note.

Goldman Sachs

encourages buying of the Brent December 2012 contract on strong demand outlook.

The JBC Energy Research Centre says that oil demand from utilities has been robust worldwide, with oil demand from Japanese utilities, for instance, predicted to reach 360,000 barrels a day in the third quarter, an uptick of 25% year-over-year, with the peak seen in August. But towards the end of the third quarter, JBC Energy expects fuel oil margins to come under pressure from ebbing utility demand and "the expected release of Middle Eastern crude finally piling supply-side pressure onto fuel oil markets."

Automatic Data Processing said companies


157,000 payrolls in June, surpassing expectations for job gains of 60,000, according to

Concurrently, the number of Americans filing for unemployment benefits


last week. The Bureau of Labor reported that 418,000 Americans filed for unemployment in the week ending July 2, down from the revised 432,000 from the week prior.

June retail same-store sales expectations were mediocre heading into Thursday's results, but so far companies are

topping forecasts.

SEB commodity research strategist Filip Petersson says crude oil appears unlikely to retreat Thursday.

"We are now well back above the levels prior to the IEA's announcement to release emergency stockpiles, without significant fundamental reasoning for this move. This has set chins wagging about speculative participation in the crude market. Whether this is attributable or not, prices definitely have a bullish tilt to them," said Summit Energy analyst Matt Smith.

Energy stocks were advancing.

Triangle Petroleum Corporation


was gaining 3.3% to $6.91,

Kodiak Oil & Gas


was surging by 5% to $6.69,

Northern Oil & Gas

(NOG) - Get Report

was adding 4.1% to $23.90,

Samson Oil & Gas


was popping by 3.5% to $2.98,

Delta Petroleum

( DPTR) was spiking by 1.5% to 47 cents,


(XOM) - Get Report

was rising 0.7% to $82.15 and


(BP) - Get Report

was ahead by 1.1% to $44.41.

-- Written by Andrea Tse in New York.

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Andrea Tse


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