Quantum Commodity Intelligence - Crude oil futures Thursday were trading sharply higher as markets continued to take solace from the latest US oil data showing a steep drop in oil inventories and record weekly oil exports.

Front-month October ICE Brent futures were trading at $97.11/barrel (1720 GMT), compared to Wednesday's settle of $93.65/b.

At the same time, September NYMEX WTI was trading $91.10/b, versus Wednesday's settle of $88.11/b, while the more-liquid Oct22 contract was trading at $90.64/b

"It looks like the global demand crude outlook is improving as global recession fears ease. This oil market is still very tight and since there is limited spare capacity and expectations of a revival of the Iran nuclear deal are dwindling," said Ed Moya, senior market analyst at brokerage Oanda. ​

The Energy Information Administration reported Wednesday that US crude stocks dropped by an unexpected 7.1 million barrels last week, while gasoline stocks retreated by 4.6 million bpd.

In addition, US crude exports were estimated at a record 5 million barrels and implied oil demand (product supplied) rose by 1.747 million bpd to 21.221 million bpd last week.

Crude prices closed around 1% higher following the report but wider concerns over the global economy and oil-demand growth prospects continue to drag on prices.

The market is also watching for further developments surrounding the Iran nuclear deal, with no official word over the last 24 hours as Iran, the US and EU study proposals and counter-proposals.

Oil largely shrugged off the soaring dollar, as the Dollar Index hit a five-week high of around 107.50 points Thursday.

Swiss investment bank UBS said in a note on Thursday that Brent crude oil futures are poised for a rebound as Chinese demand is set to recover, OPEC+ faces limited spare capacity and production levels will be hit by Europe's embargo on Russian oil. 

Meanwhile, forecasters are tracking a disturbance in the southwestern Caribbean Sea, although the weather system currently has a low chance of formation over the next week.

The tropical wave is moving over Central America before an area of low pressure develops on Friday, according to the National Hurricane Centre.