VIENNA: Oil prices reached a fresh one-year high above $75 a barrel Thursday, boosted by a weaker U.S. dollar and growing investor optimism about an economic recovery.

A slight drop in U.S. inventories — analysts had expected an increase — also supported prices.

Benchmark crude for November delivery was up 2 cents to $75.20 by midday in European electronic trading on the New York Mercantile Exchange. Earlier it reached $75.96, the highest since October 2008. The contract added $1.03 to settle at $75.18 on Wednesday.

Oil investors have fed off rising stock markets and a falling dollar this week to break out of a $65 to $75 trading range that had held since May.

The Dow Jones industrial average rose 1.5 percent Wednesday to above 10,000 for the first time in a year on encouraging earnings reports from Intel Corp. and JPMorgan Chase & Co. Most Asian stock indexes also gained on Thursday.

Meanwhile, the euro rose to $1.4946 from $1.4933. The dollar gained to 89.68 yen from 89.34 yen. Oil is traded in U.S. dollars, so a drop in the U.S. currency makes it cheaper for international investors, boosting its price.

"There's a perception that the economy is getting stronger and the dollar is getting weaker," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "But we haven't seen a real improvement in demand just yet."

Vienna's JBC Energy also suggested that fundamentals did not justify the bullish mood.

"Looking towards future price developments, the past five months are likely the best indication of what is expected, with prices moving sideways in a $60-$75 window," said a JBC newsletter. "There is currently no fundamental reason supporting a price rise and the path back to $100 per barrel will be a long and protracted one.

"Market participants have already priced in a reasonable economic recovery and it is more likely that prices will fall to $65 per barrel instead of surging to $90 per barrel," JBC said.

Still a slight and unexpected fall in U.S. oil inventories added to the upward trend. The American Petroleum Instituted noted Wednesday that crude stocks dropped 172,000 barrels. Analysts had expected a jump of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies declined 2.7 million barrels, the API said, while analysts had anticipated an 1.6 million barrel gain.

In other Nymex trading, heating oil was flat at $1.95 a gallon. Gasoline for November delivery gained more than a cent to fetch $1.87 a gallon. Natural gas for November delivery jumped by more than 4 cents to $4.47 per 1,000 cubic feet.

In London, Brent crude rose 11 cents to $73.21 on the ICE Futures exchange.