UPDATE 8-Oil ends at 8-week high on gasoline inventory drop

* U.S. gasoline stocks show surprise drawdown

* Profit-taking wipes out some gains

* OPEC now thinks 2010 world demand will rise 880,000 bpd

* Coming up: Weekly jobless claims report on Thursday

(Recasts first paragraph)

By Rebekah Kebede

NEW YORK, March 10 (Reuters) - Oil prices settled at an eight-week high on Wednesday in choppy trading after a government report showed that gasoline stocks in the United States dropped unexpectedly.

U.S. crude for April delivery settled 60 cents higher at $82.09 per barrel, after reaching $83.03.

London ICE Brent for April settled at $80.48, up 57 cents.

"Today's EIA data certainly has a bullish undertone with both gasoline and distillates off much more than expected," said Chris Jarvis, senior analyst, Caprock Risk Management, Hampton Falls, New Hampshire.

"Given the fact that we are heading into the driving season, a drop in gasoline supplies will drive bullish sentiment. Couple that with the dollar starting to weaken again and equities rallying and we wouldn't be surprised to see crude oil break out of this $80 level and march towards the $90 level in the coming months."

Gasoline stocks in the world's largest energy market showed a surprise drop of 2.9 million barrels to 229 million barrels last week, the U.S. Energy Information Administration (EIA) reported. [EIA/S]

And U.S. commercial crude oil stockpiles rose 1.4 million barrels to 343 million barrels in the week to March 5 -- below the 1.9 million barrels rise that analysts had been expecting.

Distillate stocks, which include heating oil and diesel, fell by 2.2 million barrels, far more than the 900,000 barrel draw predicted by the market.

Wall Street stocks rose on Wednesday, lifted by bank and technology shares.[.N]

The U.S. dollar slipped against a basket of currencies. A weaker greenback typically supports oil prices as it makes dollar-denominated commodities such as oil less expensive for holders of other currencies. [USD/]

A report showing that China's imports of crude oil in February rose to the second highest on record on a daily basis was also supportive for oil prices. [ID:nTOE62808W]

OPEC SEES DEMAND RISING

Earlier, the Organization of the Petroleum Exporting Countries (OPEC) had given a mild boost to prices when it said it now thought the world would need 28.94 million barrels per day of its crude this year -- an increase of 190,000 bpd from its previous assessment. [ID:nLDE6291EF]

It said total world demand was likely to rise by 880,000 bpd in 2010, up from a previous estimate of 810,000 bpd.

OPEC meets next week in Vienna to discuss output and analysts expect it to keep targets unchanged. [ID:nLDE62715Z]

OPEC members have suggested prices around $70 to $80 are reasonable, and on Monday, Algeria said levels in the low $80s were fair. [ID:nLDE61P1NL]

The group's biggest producer, Saudi Arabia, will reduce crude supply in April to a major Asian buyer, but will keep full contracted volumes to others. [ID:nTOE62406V] (Additional reporting by Robert Gibbons, Gene Ramos, Eileen Moustakis in New York, Jo Winterbottom in London; Editing by Lisa Shumaker)