By Herbert Lash
NEW YORK (Reuters) - Rising demand pushed U.S. crude above $50 a barrel on Thursday, while sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months.
Energy shares rose on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the S&P 500 in the United States, while major European indexes gained and the Dow set a new closing high.
West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness prompted bullish sentiment in the oil market.
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"Anticipation is growing that this could quicken the pace of oil market rebalancing," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.
U.S. crude <CLcv1> rose 59 cents to settle at $49.89 a barrel and Brent <LCOcv1> settled up 31 cents at $55.47.
Brent has climbed more than $10 a barrel over the past three months and is close to where it was at the beginning of the year, roughly trading between $55 and $57 a barrel.
BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 a barrel as major producers kept output restricted.
Meanwhile, the new guidance from the Bank of England pushed sterling to a one-year high against the U.S. dollar as investors priced in a more than 50 percent chance of a rate hike before the year's end.
The central bank said its tolerance for above-target inflation has declined even if Britain's departure from the European Union remained a risk. Data this week showed British prices rising faster and unemployment falling to a four-decade low.
Sterling <GBP=> was last trading at $1.3402, up 1.45 percent on the day. Earlier it rose to a 12-month high of $1.3404.
Britain's blue-chip FTSE 100 share index <.FTSE> fell sharply after the BoE warning, which followed a monetary policy meeting, and closed down 1.14 percent to lows last seen in May.
In other currency trading, the dollar index <.DXY> fell 0.41 percent, while the euro <EUR=> was up 0.17 percent to $1.1905.
The Japanese yen strengthened 0.01 percent versus the greenback at 110.47 per dollar.
ENERGY SHARES RISE
Energy stocks helped put the Dow in positive territory as Exxon Mobil Corp <XOM> rose 0.4 percent to $80.09 while Chevron Corp <CVX> gained 0.24 percent to $114.45.
Also giving the Dow a boost was Boeing Co <BA.N>, which rose 1.36 percent after Deutsche Bank raised its share price target.
In Europe, Italy's ENI SpA <ENI.MI> rose 0.59 percent and France's Total SA <TOTF.PA> gained 0.49 percent, helping lift the EURO STOXX 50 index <.STOXX50E> of leading EU shares.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.05 percent while the pan-European FTSEurofirst 300 index <.FTEU3> closed up 0.13 percent.
The Dow Jones Industrial Average <.DJI> rose 45.3 points, or 0.2 percent, to 22,203.48. The S&P 500 <.SPX> fell 2.75 points, or 0.11 percent, to 2,495.62 and the Nasdaq Composite <.IXIC> dropped 31.10 points, or 0.48 percent, to 6,429.08.
U.S. Treasury yields briefly extended edged higher with the 10-year yield touching a three-week peak after data showed a faster-than-forecast 0.4 percent increase in domestic consumer prices in August.
Germany's 10-year bond yield hit a 3-1/2-week high as a rise in domestic consumer prices in the United States rekindled bets of a December interest rate hike in the United States, the world's biggest economy.
Prices of 10-year benchmark U.S. Treasury notes <US10YT=RR> traded little changed to 2.1935 percent.
German Bunds <DE10YT=RR> last rose 1 basis point in price to yield 0.412 percent.
U.S. gold futures <GCv1> for December delivery settled up 0.1 percent at $1,329.30 an ounce.
(Reporting by Herbert Lash; Editing by Bernadette Baum and Leslie Adler)