Oil prices circle $94 ahead of ECB update

Futures prices for U.S. crude oil advanced Thursday, aided by a slightly weaker dollar ahead of a monetary-policy update from the European Central Bank, as well as monthly U.S. labor-market figures due at the end of the week.

Crude for July delivery  picked up 22 cents, or 0.2%, to $93.95 a barrel in electronic trade during Asian hours.

U.S. oil supplies recorded larger-than-expected weekly declines, according to separate reports from the government and the American Petroleum Institute. But futures on Wednesday gained a modest 43 cents, or 0.5%, as a soft report on from ADP on private-sector hiring in May dampened prospects for energy demand.

The ADP jobs report arrived ahead the Friday release of the government’s own employment report, and a weak reading there could further dim energy-market sentiment.

But before Friday’s figures, the European Central Bank on Thursday is expected to reduce its economic forecasts, and ECB President Mario Draghi is due to speak about conditions in the troubled euro-zone economy.

London-traded July Brent crude oil  rose 11 cents, or 0.1%, to $103.15 a barrel on Thursday.

Ahead of the ECB updates, the U.S. dollar  turned slightly lower against major rivals. A weaker greenback tends to aid oil and other commodities denominated in dollars, as it makes them less expensive for holders of other currencies.

On Wednesday, the U.S. Energy Information Administration’s report that U.S. crude-oil supplies fell 6.3 million barrels for the week ended May 31, to 391.3 million barrels. Analysts polled by Platts were looking for a 1-million-barrel decline.

The oil-supply decline of 6.3 million barrels as reported by EIA supported the price of Nymex crude, “but a falling S&P 500  on concerns that the Federal Reserve could begin reducing asset purchases later this year prompted at least some offsetting risk-off trade flow,” wrote Citi Futures energy specialist Tim Evans late Wednesday.

“This worry regarding Fed policy could also complicate the reaction to Friday’s U.S. employment report,” he said. Economists polled by MarketWatch expect the economy to have added 168,000 jobs in May, with the unemployment rate holding steady at 7.5%.

In other energy-futures trade Thursday, July gasoline  rose 1 cent, or 0.2%, to $2.83 a gallon, and July heating oil  was up less than a cent, or 0.1%, to $2.859 a gallon.

The EIA said on Wednesday said gasoline supplies fell by 400,000 barrels, while distillate stockpiles, which include heating oil, rose by 2.6 million barrels.