LONDON (Reuters) - Oil climbed above $70 a barrel on Thursday after a surprisingly steep decline in U.S. gasoline inventories revived supply worries during the height of the summer driving season.

A slowdown in gasoline imports drained inventories of motor fuel in the world's top consumer by 700,000 barrels last week versus an expected rise of 1.2 million barrels.

Heavy buying on Thursday pushed U.S. crude, or WTI, above $70 for the first time since September 2006. Analysts expect its discount to London benchmark Brent to narrow because of falling stocks at Cushing, Oklahoma, the U.S. contract's delivery point.

U.S. crude surged $1.20 to $70.17 by 1457 GMT, while London Brent crude, which has been a better gauge of global prices, was up 41 cents at $70.94 a barrel.

"Oil prices have moved higher on a supportive set of U.S. oil inventory data," said Barclays Capital.

"The rapid decline in Cushing crude oil stocks suggests further gains for WTI relative to Brent crude."

U.S. crude has been trading at an atypical discount to Brent since February, weighed down by higher inventories. Analysts see $70 for U.S. crude as a pivotal level.

Inventories of crude at Cushing fell by 1.4 million barrels last week, while the country's total stocks rose by 1.6 million barrels to a fresh nine-year high.

"In our view, technical trading around the $70/barrel barrier remains the predominant driver," said Olivier Jakob of Petromatrix.

Oil, along with other commodity and financial markets, also regained its poise after falling earlier this week on concerns that troubles in U.S. mortgage securities could raise borrowing costs and make investors avoid higher-risk markets.

Some analysts see little prospect of much lower prices.

"It's hard to see a scenario where prices go down much. It looks like there's quite a lot of risk packed into current prices," said Simon Wardell at Global Insight.

"We're probably in for prices to maintain their current height -- and they may actually rise towards the end of the fourth quarter."

(Additional reporting by Yaw Yan Chong in Singapore)