Oil prices rebounded from early sell-off on Thursday as data showed U.S. economy shrank at a slower pace, boosting hopes for a sooner recovery.

The contract dropped below 70 U.S. dollars a barrel in the morning session as ample stockpiles weighted on the market. Oil jumped back to positive territory along with the equities, erasing the earlier loss and ending up more than 1 percent before the end of the session.

Helping to lift the oil prices was the news that U.S. gross domestic product (GDP) shrank at a one percent annual rate from April to June, less than expected. In a separate report, initial jobless claims fell by 10,000 to 570,000 last week, suggesting some easing in the pace of layoffs.

Light, sweet crude for October delivery rose 1.06 dollars, or 1. 5 percent, to settle at 72.49 dollars a barrel on the New York Mercantile Exchange.

In London, Brent Crude for October delivery gained 1.10 dollars to 72.68 dollars a barrel on the ICE Futures exchange.