Investing.com - Crude oil futures edged higher during European morning hours on Thursday, as optimism about the U.S. energy demand outlook supported prices.
Oil prices struggled for upside traction due to a slightly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, traded at 83.23, just below the previous session's seven-month high of 83.33.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD92.72 a barrel during European morning trade, up 0.2% on the day.
New York-traded oil prices traded in a range between USD92.19 a barrel, the daily low and a session high of USD93.02 a barrel. Nymex oil prices rose to USD93.43 a barrel on Tuesday, the strongest level since February 25.
A larger-than-expected increase in U.S. oil supplies also kept a lid on gains. The U.S. Energy Information Administration said Wednesday that oil inventories rose by 2.6 million barrels last week, above expectations for an increase of 2.4 million barrels.
Total U.S. crude oil inventories stood at 384.0 million barrels, the highest level for this time of year since 1982.
Oil traders looked ahead to the release of a weekly government report on U.S. initial jobless claims later in the day, as investors search for further signs the U.S. economic recovery is gaining momentum.
Data on Wednesday showed that U.S. retail sales rose 1.1% in February, beating expectations for a 0.5% increase. Core retail sales, which exclude automobile sales, also rose more-than-expected, climbing 1.0% compared to expectations for a 0.2% gain.
The positive retail sales data fuelled optimism that the recovery in the U.S. is gaining traction after a report last week showed that the economy added more jobs than expected in February, bringing the unemployment rate to a four-year low of 7.7%.
The U.S. is the world's biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, in Europe, European Union leaders were set to begin a two-day economic summit in Brussels later in the day.
Market players were also awaiting the outcome of an auction of long-dated Spanish government bonds later Thursday, after Madrid saw borrowing costs fall to their lowest level since April 2010 following an auction of six-and 12-month bonds on Tuesday.
Despite recent gains, concerns over the global economic outlook remained after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery declined 0.1% to trade at a three-month low of USD108.18 a barrel.
The spread between the Brent and crude contracts narrowed to USD15.46 a barrel, the lowest gap since January 22.
The gap between the two contracts narrowed Wednesday after U.S. government data showed supplies at Cushing, Oklahoma, the delivery point for Nymex futures, fell the most since May 2011 last week.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
