U.S. crude futures retreated Thursday, a move that analysts attributed to the stronger U.S. dollar.
WTI light sweet crude for August delivery was trading at $87.11, down 55 cents, while Brent crude futures were up 94 cents to $100.71 a barrel.
The moves followed a decision by China to lower its interest rate for the second time in less than a month. The European Central Bank cut its main interest rate to an historic low of 0.75% Thursday, as expected, offering a degree of relief to the euro zone's faltering economy amid signs that inflationary pressures are fading.
The moves contributed to a 0.87% strengthening of the U.S. dollar index as measured against all currencies. The U.S. dollar also strengthened 1.2% against the euro. Since crude is traded in dollars, a stronger dollar renders oil more costly for buyers who use other currencies.
"If the dollar is going to get stronger, crude is going to get weaker," said Tyche Capital Management managing member Tariq Zahir.
Thursday's trading could see additional moves by oil in light of the release of a much-watched U.S. energy inventory report at 11 a.m. There will also be fresh data from the Institute of Supply Management.
"We're all over the place," said Matt Smith, an analyst at Summit Energy. "Crude is being pushed by a myriad of different releases. It's probably going to stay choppy."
Brent futures strengthened on news that an oilfield strike in Norway was expanding. Norway's Statoil ASA (STO) said it was preparing to shut down production as the country's oil industry association announced a lockout starting midnight on Monday after talks over a labor dispute broke down.
Statoil said the shortfall in its production will be around 1.2 million barrels of oil equivalent a day.
