USA oil price decreased on Wednesday as investors were awaiting the closely-watched inventory data in the country.
The futures on USA light crude oil with delivery in April fell by 0.78% to 61.31 Dollars per barrel, while Brent variety erased 0.58% to 64.87 USD per barrel.
West Texas Intermediate for March delivery, which expires Tuesday, rose 0.2% to $61.79/bbl on the New York Mercantile Exchange.
Brent has retreated below the $65/b earlier in the session despite a release from the American Petroleum Institute late Wednesday showing United States crude stocks had dropped by over 900,000 barrels last week.
The dollar rose to a more than one-week peak against a basket of other currencies late on Wednesday, extending its recovery from last week, as minutes of the Federal Reserve's January meeting showed policymakers confident in the need to keep raising interest rates. But price growth has slowed this year as US drillers put more rigs to work, pushing the country's output to a record.
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The immediate trigger is last week's confrontation - the first known direct engagement between the Israeli and Iranian militaries. Israel is "absolutely resolute in our determination to stop and roll back the aggression of Iran's regime".
Inventories usually rise at this time of year, as many refineries cut crude intake to conduct maintenance, but a bottleneck in Canada's pipeline system has reduced US imports and pushed USA stocks lower.
Crude stocks at the Cushing, Oklahoma, delivery hub for US futures USOICC=ECI fell 2.7 million barrels last week, the ninth straight week of drawdowns, the EIA said.
However, expanding USA stockpiles could depress further gains in the crude oil market.
The correlation between moves in the oil price and the dollar has strengthened in recent weeks, as investors increasingly sell other assets to buy the US currency on expectations of a faster pace of rate rises.
The Energy Information Administration report on Thursday also showed that crude production ticked lower for the first time since early January, while supplies at the nation's biggest hub of pipelines and storage tanks in Cushing fell for a ninth straight week to the lowest level since 2014. China's crude oil demand growth could slow down this year to 4.2 percent from 5.5 percent last year, according to S&P Platts analysts. If confirmed by EIA data, that would be the ninth consecutive weekly fall at Cushing.