New York--A surprising drop in gasoline inventories helped propel a weeklong rally in oil Friday, pushing the price of a barrel to $78.

Benchmark crude for November delivery was up 10 cents at $77.68 in mid-morning trading on the New York Mercantile Exchange. Earlier in the session, it rose as high as $78.17. On Thursday, the contract rose $2.40 to settle at $77.58.

The Energy Information Administration said Thursday that U.S. gasoline supplies fell 5.2 million barrels while analysts had expected a jump of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude supplies rose 400,000 barrels, the EIA said, while analysts had anticipated a 2.2 million barrel gain.

A falling U.S. dollar has also helped boost the price of oil. Until this week, oil had bounced between $65 and $75 since May.

“Oil has finally has broken out of the high set last June and the high I projected when the Fed went to quantitative easing last March,” said Phil Flynn, an analyst with PFGBEST, a research firm. “The market has finally broken out as the weak dollar and better economic data transcends oversupply on the perception that supplies will tighten more.”

Meanwhile, concerns still exist in some corners that global demand remains tempered, and that current prices may be an illusion.

"The recent price rise has been very impressive and markets could well test $80, but in our opinion a correction next week is the likely scenario to back below $75 and even to the low $70s given oil fundamentals remain poor, global inventories are still high and demand recovery is far from convincing," said London's Sucden Research in a report.

Oil services companies such as Chevron (CVX) and Exxon Mobil (XOM) fell Friday with the broader market.

In other Nymex trading, heating oil fell 0.71 cent to $2.0110 a gallon, while gasoline for November delivery slipped 0.95 cent to $1.9354 a gallon. Natural gas for November delivery rose 4.4 cents to $4.526 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 20 cents to $76.03 on the ICE Futures. exchange.