London - AFP
Oil prices drifted lower on Thursday, but held off recent lows as traders eyed the weaker dollar and awaited the latest economic data from top crude consumer the United States.
Brent North Sea crude for delivery in November dipped 23 cents to stand at $91.15 a barrel around midday in London compared with Wednesday's close.
US benchmark West Texas Intermediate (WTI) for November dipped one cent to $87.30 a barrel.
The market will later focus on US weekly jobless claims data for the latest reading on the health of the US economy.
"Trading activity remains subdued and we could see sideways to lower trading levels" ahead of the data, said Sucden brokers analyst Kash Kamal.
New York crude had dropped to an 18-month low of $86.83 a barrel on Wednesday after the US petroleum inventory report showed mounting stockpiles. That was the lowest level since mid-April 2013.
Brent meanwhile tumbled to $90.57, a low point last reached on June 25, 2012.
"Oil prices ... are recovering slightly from the lows they recorded yesterday," said Commerzbank analysts on Thursday.
"This is thanks to a considerably weaker US dollar following the publication of minutes of the last US Fed meeting that were interpreted as being less hawkish than anticipated."
Minutes of the US central bank's Federal Open Market Committee meeting showed members were wary about the timing of raising interest rates from their record lows.
"The cautious outlook on the economy and inflation has toned down expectations for the Fed to tighten," said Desmond Chua, market analyst at CMC Markets in Singapore.
A softer greenback makes dollar-denominated oil cheaper for holders of other currencies, and therefore tends to stimulate demand and prices.
The oil market had also fallen on Wednesday after news that American crude stockpiles increased last week by far more than market expectations.
The Department of Energy said US crude reserves soared 5.0 million barrels in the week ending October 3, much above the 1.9 million billion forecast by analysts surveyed by Dow Jones Newswires.
But some analysts said prices will likely be dragged lower by weaker demand owing to a stuttering global economy and a crude market awash with supplies.
on Tuesday, the International Monetary Fund cut its projection for world economic growth this year and next, and warned of stagnation in developed economies.
"Crude prices are likely to remain soft in the near term," said Sanjeev Gupta, who heads the Asia-Pacific Oil & Gas practice at professional services organisation EY.