Chinese data, U.S. crude stocks, lift oil prices

Crude oil prices extended their rally Thursday with key indices gaining ground on reports of modest growth in Chinese manufacturing.

Brent crude oil prices gained 1 percent from the previous close in early trading Thursday to fetch $65.71 per barrel. Brent prices, however, are still below the $66.16 per barrel start to May.

Crude oil prices have been on a steady rise since early 2015 slumps near the $50 threshold on signs of modest economic recovery. Manufacturing data, measured by the purchasing managers index of 49.1, was a slight improvement for May for China.

China is the second-largest consumer of oil in the world. The Organization of Petroleum Exporting Countries said that, while slowing, Chinese economic expansion should lead to more demand than its peer economies.

Japan, the world's third-largest economy, reported Wednesday that real gross domestic product grew by 2.4 percent from January through March, an improvement over the revised 1.1 percent reported from October through December.

Japan emerged from recession in February.

Prices were supported further by data from the U.S. Energy Information Administration showing U.S. crude oil inventories were down by 2.5 million barrels last week for the third consecutive decline. Domestic output of 9.3 million barrels per day was the lowest level since early February.

West Texas Intermediate responded to the swing away from the supply side with 1.3 percent gain from the previous session to trade early Thursday at $59.79, up 1 percent from May 1.