Investing.com - West Texas Intermediate oil futures bounced off a four-week low on Thursday, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.
On the New York Mercantile Exchange, crude oil for July delivery tacked on 30 cents, or 0.53%, to trade at $57.81 a barrel during European morning hours.
Thursday's government report was expected to show that U.S. crude oil stockpiles fell by 0.9 million barrels last week, while gasoline stockpiles were forecast to decrease by 0.5 million barrels.
The report comes out one day later than usual due to the Memorial Day holiday in the U.S. on Monday.
After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 1.3 million barrels in the week ended May 22, the first increase in four weeks.
A day earlier, New York-traded oil futures fell to $57.36, the lowest level since April 29, before ending down 52 cents, or 0.9%, at $57.51, as a broadly stronger U.S. dollar and concerns that U.S. shale production could rebound in the months ahead weighed.
U.S. oil futures have been under pressure in recent sessions amid indications that the sharp decline in U.S. drilling activity in recent months may be nearing an end.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by only one last week to 659.
Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
However, the rate of decline has slowed in recent weeks, fuelling concerns that some shale oil companies will dial up their output in the months ahead if prices stabilize near current levels.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery rose 57 cents, or 0.92%, to trade at $62.63 a barrel. On Wednesday, Brent prices slumped to $61.96, a level not seen since April 22, before closing at $62.06, down $1.66, or 2.61%.
London-traded Brent prices have been weighed by record OPEC production in recent sessions. The Organization of Petroleum Exporting Counties is expected to keep production levels unchanged when it meets on June 5, despite ongoing concerns over ample global supplies.
The spread between the Brent and the WTI crude contracts stood at $4.82 a barrel early on Thursday, compared to $4.55 by close of trade on Wednesday.
Meanwhile, in the currency market, the dollar rose to 124.30 against the yen, the most since June 2002, boosted by expectations that the economic recovery in the U.S. would accelerate the timeline for higher interest rates.
The euro moved away from a one-month low against the greenback after the Greek government said it had started drafting an agreement with its international creditors, signaling progress in long-running negotiations to unlock more financial aid.
However, European officials played down suggestions of a deal, saying negotiators still had much work to do before reaching an agreement.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.24% to 97.11 from Wednesday’s five week peaks of 97.88.
Later in the day, the U.S. was to release the weekly report on unemployment claims, as well as data on pending home sales, as investors look for fresh indications on how the economy is performing.
Economic data released in the past week, including reports on inflation, new home sales, business investment and consumer confidence all indicated that the economy is gaining momentum after a slowdown in the first quarter, supporting the case for higher interest rates later this year.