Oil prices rose Tuesday on a weaker dollar and expectations of an impending drop in U.S. oil production.
The greenback fell against other major currencies on weaker-than-expected U.S. retail sales data. Oil is priced in dollars and becomes more affordable to buyers using foreign currencies when the dollar weakens.
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Prices also got a boost from a U.S. Energy Information Administration forecast released Monday that total crude-oil production from seven key shale regions in the country would decline by 57,000 barrels a day in May from April.
Analysts cautioned, however, that the reduction wouldn't be enough to offset the global oil glut. Crude oil has halved in value since last summer on the back of surging supply and tepid demand. But prices have stabilized this year on expectations of lower U.S. production as companies have responded to the low prices with large spending cuts.
Light, sweet crude for May delivery recently rose 72 cents, or 1.4%, to $52.63 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 13 cents, or 0.2%, to $58.03 a barrel on the ICE Futures Europe exchange.
The deceleration in U.S. oil output is greater than the market is currently pricing in, a Standard Chartered analyst said.
"We believe that U.S. shale oil output is already falling, and that current rig counts imply that the month-on-month decline will exceed 70,000 barrels a day by June," Paul Horsnell, head of commodities research at Standard Chartered, said in a report.
However, the expected fall in U.S. production won't be enough to balance the oversupplied global market, analysts at Commerzbank said.
"Compared to the current oversupply of up to two million barrels per day...this would be but a drop in the ocean," the bank said in a note.
Market participants expect a few more weeks of rising U.S. oil inventories as supply continues to outpace demand, keeping U.S. oil prices under pressure. Later Tuesday, the American Petroleum Institute, an industry group, will publish its weekly oil inventory data, followed by the official EIA data on Wednesday.
Meanwhile, the Organization of the Petroleum Exporting Countries reiterated in its monthly bulletin on Monday that it isn't willing to cut production unless producers outside the oil cartel also cut. OPEC decided in November to keep its output target at 30 million barrels a day despite the global oil glut.
The latest OPEC Bulletin lays out "in very clear terms the position of the organization as far as controlling production is concerned," David Hufton of PVM brokerage said in a note. While there have been calls in recent months from various OPEC members to cut production, "the market clearly currently sees no chance of that happening," Mr. Hufton said.
Gasoline futures recently rose 0.7% to $1.8180 a gallon. Diesel futures gained 0.5% to $1.7917 a gallon. The EIA said Monday that the national average retail price of diesel fell to $2.754 a gallon in the week ended Monday, the lowest since Dec. 28, 2009.
Eric Yep contributed to this article.