NEW YORK (Dow Jones)--U.S. oil futures hovered around $95 a barrel Thursday, with traders hesitant to take large positions a day after crude's steep selloff.
Light, sweet crude for July delivery settled up 14 cents, or 0.2%, to $94.95 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently traded up $1.01, or 0.9%, to $114.02 a barrel.
Nymex futures failed to gain momentum despite a report from the International Energy Agency raising its medium-term oil price forecast. Additionally, the Commerce Department said U.S. home construction rose modestly in May, while the number of jobless claims last week fell slightly.
But none of the reports failed to inspire substantial buying, as market participants remained wary of placing big bets following Wednesday's decline of more than 4% in Nymex crude.
"The market is still very nervous," said Peter Beutel, head of the oil trading advisory firm Cameron Hanover. "There is nothing in either the employment or housing numbers to suggest that either of those is going to be a locomotive for recovery."
Other markets also traded in a narrow range. Equities were slightly higher, while the dollar was nearly unchanged.
Markets fell broadly Wednesday on fears that the Greek debt crisis was spiraling out of control, as protesters took to the streets in Athens. The crisis sent commodities and equities tumbling and lifted the dollar against the euro.
A report from the U.S. Department of Energy showing average U.S. oil demand over the last four weeks fell 3.2% from a year ago accelerated crude's decline.
Although U.S. oil demand shows signs of sputtering, the IEA on Thursday said global demand remains strong and raised its five-year oil price forecast by $19 a barrel. The Paris-based energy watchdog said oil demand will rise more than previously expected and supplies will remain tight. The report represented a more bullish take on the oil market than previous forecasts from the group, which holds substantial sway in the oil market. The IEA added that there is a "clear need" for more oil this year from the Organization of Petroleum Exporting Countries, which failed to raise production quotas at a meeting last week.
Without higher OPEC output, the oil market will suffer from lack of supply, resulting in "overheating prices" and damage to the global economy, the IEA said.
Helping to keep oil prices in a narrow range Thursday was the expiration of July options contracts, said Rich Ilczyszyn, broker at Lind-Waldock in New York. A large number of open positions at the $95-a-barrel level put pressure on the market to settle unchanged, he said.
"It's very common for the market to pin itself at a key level when there's a bunch of options that run the risk of being activated," he said.
Options are typically used to hedge risk and give traders the option, but not the obligation, to buy or sell an underlying security at a given price.
Front-month July reformulated gasoline blendstock, or RBOB, settled up 2.59 cents, or 0.9%, to $2.9494 a gallon. July heating oil rose 1.9 cents, or 0.6%, to $3.0038 a gallon.