By Ayenat Mersie
NEW YORK (Reuters) - Oil prices rose on Thursday as the equities markets rallied and as market participants weighed a rise in U.S. crude inventories and production against continued OPEC supply curbs.
Prices for the more actively traded June Brent crude futures were up 58 cents to settle at $69.34, while the May contract expiring on Thursday was up 74 cents at $70.27.
West Texas Intermediate (WTI) crude futures gained 56 cents to settle at $64.94.
WTI's discount to Brent has grown to more than $5 a barrel, the biggest since January, making Brent-linked crudes less attractive to refiners.
Oil has risen about 4 percent since January, on track for the longest stretch of quarterly gains since late 2010.
"The equities market is rallying and that's lending support to oil," said Philip Streible, senior market strategist at RJO Futures in Chicago. All three major U.S. stock indexes were positive on Thursday.
The dollar against a basket of currencies was flat on Thursday, which was supportive for crude prices, said Streible. A weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.
Strong compliance on supply cuts from members of The Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia have pushed up prices. OPEC sources said the group and its allies are likely to keep their deal on cutting output for the rest of 2018.
But growing supply in the United States is pressuring prices. Commercial U.S. stocks rose 1.6 million barrels in the past week, while output hit a record 10.43 million barrels per day (bpd).
"I looked at the inventory report as not bearish," said Bill Baruch, president of Blue Line Futures in Chicago. "We actually drew down more from products than from crude."
Geopolitical concerns, especially tensions between Saudi Arabia and Iran, continued to prop up the market, said Gene McGillian manager of market research at Tradition Energy in Stamford. Meanwhile, "worries about demand being affected by a possible trade war kind of receded," he said.
But, the gains may be fragile, said Petromatrix strategist Olivier Jakob.
"The price action last week was pretty clear. The objective on that move was to take out the highs of 2018, but that has not been done and the price action of the last three days has not been very convincing."
The Shanghai crude oil futures contract launched on Monday and has lost about 8 percent since opening.
On Thursday, Reuters reported that China was taking its first steps to pay for imported crude oil in yuan instead of the U.S. dollar.
