Crude oil futures rose slightly in volatile trade Wednesday, as investors looked past concerns about consumption and oil demand after a bigger than expected drop in April retail sales and focused on expectations that U.S. crude supplies might have fallen. Crude oil for June delivery was last up 17 cents, or 0.3%, at $59.01 a barrel. Oil briefly turned lower after the government reported a drop of 0.4% in retail sales in April. Economists surveyed by MarketWatch were forecasting a small rise in sales in April. See full story. But oil recovered some legs ahead of the key weekly report on petroleum stockpiles from the Energy Information Administration due at 10.30 a.m. Eastern. Crude traded higher in early trade, after the American Petroleum Institute (API) late Tuesday said crude inventories had fallen by 3.1 million in the latest week. Analysts had expected an increase. The EIA and the API use different criteria for gauging inventory levels, and the EIA's report is the most influential. "The oil price may rise further, should the [government's] inventory data show an unexpected inventory decline as well," said Barbara Lambrecht, a commodities analyst at Commerzbank. Analysts at energy information provider Platts expect inventories to have risen across the board. Crude is pegged to show an increase of 1.4 million barrels, with gasoline stockpiles seen gaining 400,000 barrels, and distillates, which include diesel and heating oil, seen growing by 1 million barrels on the week. Meanwhile, the EIA said Tuesday in a monthly report that it now projected world oil demand to fall by 1.8 million barrels per day in 2009, a decline that is 400,000 barrels larger than the EIA had forecasted last month.

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