Oil prices held above $72 per barrel in New York as US oil stockpiles fell to the lowest level since January and country's economy showed signs of improvement.

In the New York Mercantile Exchange, benchmark crude for October delivery soared to $72.51 per barrel, gaining 2.23 per cent or $1.58 on the news that US manufacturing was increasing.

In addition, inventories dropped by 4.73 million barrels as compared with 2.5 million-barrel decline estimate by analysts.

A weaker US dollar against euro and pound has also boosted oil prices. The dollar dropped to $1.4767 against euro from $1.4709 in New York.

Speaking on the soaring oil prices, Liberty Trading Group's president, James Cordier, said, "The only reason prices are rallying today is again because of the weakness of the dollar and the strength of the stock market."

Two days back on Tuesday, oil soared to settle at $70.93 per barrel, up 3 per cent.

In London, Brent crude was down 3 cents to $71.64 per barrel on the ICE Futures Europe exchange.