LONDON (AFP) - Oil prices rose on Thursday, boosted by weakness of the dollar, as the market shrugged off a downgrade by OPEC of global demand growth for crude, analysts said. New York's main oil futures contract, light sweet crude for June delivery, rose 88 cents to 125.36 dollars per barrel. It had struck a record high of 126.98 dollars on Tuesday but slumped Wednesday. On Thursday, London's Brent crude contract for June gained 77 cents to 122.63 dollars. "Crude futures were a little higher (Thursday) ... recovering from last night's losses, also underpinned by a temporary weakness in the US dollar against the euro on positive German growth data," said Sucden analyst Andrey Kryuchenkov. "The broad weakness in the greenback had played a vital part in the recent oil rally, making crude relatively cheaper for foreign investors and as market participants were buying into commodities to hedge themselves against inflation. "However, in the past weeks investor attention was diverted to the market fundamentals, following various supply disruptions and strike actions," Kryuchenkov added. On Thursday, OPEC downgraded slightly its 2008 estimate of growth in world oil demand, as high prices and slower economic growth brake demand in major industrialised countries and the United States in particular. Global oil demand was now projected to grow by 1.35 percent in 2008, compared with the previous estimate of 1.4 percent, the Organization of Petroleum Exporting countries said in its May monthly report. "World oil demand growth in 2008 is forecast at 1.2 million barrels per day (bpd) to average 86.95 million bpd, representing a minor downward revision from last month," OPEC said. Oil prices had slumped on Wednesday after the US Energy Information Administration reported that American crude oil reserves rose by 200,000 barrels in the week ending May 9. That was less than market expectations for a gain of 2.25 million barrels. The EIA also said US gasoline, or petrol, stockpiles fell by 1.7m barrels, which was larger than analysts' consensus forecasts for a drop of 200,000 barrels. New York crude struck a record high of $126.98 a barrel on Tuesday despite a report by the International Energy Agency (IEA) which cut its forecast for growth in global oil demand. The Paris-based IEA, energy policy adviser to major industrialised countries, predicted that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd) about 390,000 bpd less than its previous estimate given in April. The energy monitoring agency also said it now estimated world oil demand in 2007 at 85.8 million bpd, 150,000 barrels less than the April estimate. Crude oil prices have surged since crashing through the 100-dollar-a-barrel barrier at the start of the year, but many analysts argue that the market has recently been looking overbought.