Oil prices diverged on Thursday as traders balanced China\'s surprise interest rate cut, stronger-than-expected US demand and Norwegian supply concerns against the rebounding dollar, dealers said. Brent North Sea crude for delivery in August jumped $1.47 to $101.24 a barrel in late afternoon deals in London. However, New York\'s main contract, light sweet crude for August, declined by 25 cents to $87.41 a barrel, erasing earlier gains. China cut interest rates for the second time in a month on Thursday, a surprise move that analysts said might indicate the world\'s biggest energy consuming nation was slowing more quickly than expected. The changes, which take effect from Friday, will see the benchmark one-year lending rate drop by 0.31 percentage points and the deposit rate fall by 0.25 percentage points. The cut will effectively adjust the one-year deposit rate to 3.0 percent and the one-year loan rate to 6.0 percent, China\'s central bank said. \"It was the surprise cuts to the (China\'s) lending and deposit rates which really helped to lift (Brent) crude,\" said GFT analyst David Morrison. \"Traders interpreted China\'s move as a determination by the country to combat slowing growth. This should therefore feed through to demand for crude from the world\'s second largest country by GDP.\" He added: \"Crude also benefited from the latest update on US crude inventories from the Energy Information Administration (EIA). Today\'s data showed a much larger than expected decline in stockpiles.\" American oil inventories fell by 4.3 million barrels in the week ended June 29, the EIA revealed Thursday. That comfortably beat market expectations for a 1.4 million-barrel drop, according to analysts polled by Dow Jones Newswires, and indicated solid demand in the world\'s largest oil consuming nation. The report was published one day later than normal due to Wednesday\'s Independence Day holiday in the US. Market prices were also boosted Thursday as Norwegian state oil group Statoil said it was preparing to shut down all production on the Norwegian continental shelf from the start of next week. At the same time, however, traders eyed the rebounding greenback, which makes dollar-priced crude more expensive for buyers using weaker currencies. In turn, that tends to dent demand and prices. Oil remains \"under pressure from a stronger dollar\", concluded VTB Capital analyst Andrey Kryuchenkov.