The trend of rising oil prices has been reversed in recent weeks

US light crude rose more than $2 to $61.40 a barrel in New York while Brent traded up $2.19 to $62.05 in London.

Weekly crude inventories in the US fell by more than three million barrels in the week ending October 20.

The drop comes at a time when Opec members are poised to cut output in an effort to stabilise prices.

Market uncertainty was heightened by attacks on three Shell oil platforms in the Niger Delta, which forced production to be curtailed.

'Huge drop'

The cost of a barrel of oil had fallen 20% to below $60 in recent days since hitting a peak of $78 in July.

But prices have picked up after Saudi Arabia and Abu Dhabi confirmed they would proceed with quota cuts agreed at a recent Opec meeting, and Iran indicated that it would soon follow suit.

The three countries pledged to cut output by more than 650,000 barrels a day.

Analysts said they were not sure whether the drop in US inventories was due to lower output from Opec or lower demand from US refiners.

"That's a huge one-week drop," said Phil Flynn, an oil analyst at Alaron Trading Corporation.

Policymakers are concerned about renewed volatility in the oil market with the possibility of a sharp rebound following recent falls.