Oil prices rose on Monday, boosted by a forecast of higher demand amid growing hopes of economic recovery, traders said.

New York's main contract, light sweet crude for delivery in November, climbed 81 cents to 72.58 dollars a barrel.

Brent North Sea crude for November delivery gained 87 cents to 70.87 dollars.

Prices were supported by an International Energy Agency (IEA) report on Friday that forecast a rise in demand at the end of this year and into 2010 as the global economy recovers from a slump.

"The IEA sharply revised its oil demand forecast for 2010 upwards, so that has added to the buoyant mood," said Victor Shum, an analyst for energy consultancy Purvin and Gertz.

The agency revised upwards its estimate for global oil demand this year by 200,000 barrels a day and for next year by 350,000 barrels a day.

Despite its upbeat forecast on demand, the IEA report also cautioned that prices were unlikely to rise dramatically.

Demand for crude oil has plunged amid the worst financial downturn since the Great Depression, with oil prices falling from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December. They have since won back ground on recovery hopes.