Brent June crude oil futures expired slightly higher on Thursday, buoyed by a weaker dollar even as a bevy of slack U.S. economic data capped gains in the stock market.
"If we have to pick a driver for today, it's that the dollar's under pressure," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The U.S. dollar fell against a basket of six currencies , making crude oil and other dollar-denominated commodities cheaper for holders of foreign currencies.
Brent June crude oil futures expired 12 cents higher at $103.80 per barrel.
The U.S. economy has seen some signs of recovery, but dour economic data on Thursday pointed to slower economic growth. The Labor Department reported that new claims for jobless benefits rose last week to a seven-month high. Other reports showed factory activity slipped in the mid-Atlantic region while groundbreaking declined at home construction sites.
The Standard & Poor's 500 stock index dipped 0.23 of a point or 0.01 percent, to 1,658.55. Investors were disappointed that the index, up 16 percent this year and trading at historic highs, failed to breach 1,665, said Brian LaRose, technical analyst with United-ICAP in Jersey City.
Brent July crude futures settled 28 cents higher at $103.78 per barrel. U.S. oil settled 86 cents higher at $95.16 per barrel, after bouncing off the 200-day moving average on Wednesday.
The spread between U.S. benchmark West Texas Intermediate and European Brent widened beyond $10 per barrel for the first time since May 7, reflecting a costly rail transport bill for U.S. refiners. The spread settled at $8.64.
Brent crude oil would need to jump above $105.25 per barrel and U.S. crude oil above $96.65 in order for bullish momentum to take hold, LaRose said.
Expectations that central bank monetary stimulus policies "will make commodities more attractive," also supported oil, McGillian said.
The U.S. Federal Reserve is purchasing $85 billion per month in mortgage and Treasury securities in an effort to stoke investment.
GASOLINE, MIDDLE EAST DRIVES PRICES
Gasoline stockpiles on the East Coast rose by 1.8 million barrels in the week as the nation heads into the summer driving season, and were up nearly 10 million barrels from the same time last year.
But reports of a brief shut down on Colonial Pipeline sent U.S. gasoline futures above the 200-day moving average for the first time since early April, lending some support to U.S. crude oil.
Oil prices also drew some support from news that the United Nations' nuclear agency failed to persuade Iran to let it resume an investigation into suspected atomic bomb research, reviving worries about supply disruption.
As well, supply interruptions from Libya's eastern port of Zueitina lent support, brokers said. (Additional reporting by Robert Gibbons in New York and Julia Payne in London.; Editing by Jane Baird, Keiron Henderson, Chris Reese and David Gregorio)