RTTNews - Crude oil prices turned modestly higher Thursday even after the International Energy Agency said that oil demand remains very weak. The dollar came under pressure in afternoon dealing, boosting crude prices.

Light sweet crude for June finished at $58.62 per barrel, up 60 cents on the day. Prices had dropped as low as $56.55 early in the morning.

The International Energy Agency reduced its forecast for oil consumption by estimate to 230,000 barrels a day to 83.2 million. Earlier this week, the Organization of Petroleum Exporting Countries and the Energy Department lowered their outlooks.

Adding to the demand concerns, the U.S. Labor Department said initial jobless claims jumped to 637,000 for the week ended May 9th. This was up 32,000 from the previous week's revised total of 605,000.

A separate Labor Department report showed that the producer price index rose 0.3 percent in April following an unrevised 1.2 percent decrease in March. Economists had been expecting a slightly more modest increase in prices of about 0.2 percent.

But, oil's hedge appeal received a boost as the dollar moved lower against the sterling and euro. With the decline, the dollar drifted toward a recently-seen seven-week low against the euro and toward a four-month low against the pound.

EIA data released yesterday showed crude oil inventories decreased by 4.7 million barrels in the week ended May 8. Gasoline stocks decreased by 4.1 million barrels last week.

However, data also showed that demand for the recent four-week period averaged nearly 18.2 million barrels per day, down by 7.9 percent compared to the similar period last year.

AAA data showed the averaged gallon of regular gasoline was $2.281, up from $2.05 a month ago but still below the $3.758 from a year ago.

Oil lost 83 cents on Wednesday after it had earlier touched as high as $59.90, challenging Tuesday's six-month high of $60.08.

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