LONDON: Crude prices traded in a narrow range on Thursday as optimism over equity markets helped offset a surprise increase in US oil inventory levels and a firm US dollar.
A respite from bearish economic news in China, where markets are closed for public holidays for the rest of the week, also helped hold oil prices rangebound after weeks of huge swings.
Brent slipped 15 cents to $50.35 a barrel by 1126 GMT, having gained 94 cents in the previous session.
US crude fell 2 cents to $46.23 a barrel, up from the day's low of $45.65 and after settling 84 cents higher on Wednesday.
Olivier Jakob, managing director of PetroMatrix, said the market was quietening down after extreme moves, with holidays in the two largest oil consuming countries - the United States and China - helping temper the appetite for risk taking.
"We're probably starting to stabilise" after several days of flat price volatility, Jakob said, adding that the US Labor Day long weekend would "lessen a little bit the appetite" for taking positions in the market.
US crude has see-sawed, climbing 27.5 percent over three trading sessions to Monday's close - its biggest such gain since August 1990 - after plunging to a 6-1/2-year low of $37.75 a barrel early last week.
Brent has been similarly erratic, gaining 28 percent over the last week in August before dipping back to as low as $47.74 a barrel on Wednesday.
A European Central Bank meeting later on Thursday, in which the bank is expected to lower its growth and inflation forecasts, boosted investor hopes that global monetary policy will be kept looser for longer. US payroll data on Friday is also on the horizon.
"We've cooled off slightly" in terms of oil volatility, said Kash Kamal, analyst with Sucden.
"This seems to be driven largely by hopes of further intervention by central banks. Short term, this is bullish for crude, but that optimism could fade quickly as investors are reminded of the fundamentals."
US dollar strength that makes oil more expensive for the holders of other currencies and stock builds in the United States, forestalled any sustained price gains.
US crude stocks gained 4.7 million barrels to 455.4 million in the week to Aug. 28, the biggest one-week rise since April, data from the US Energy Information Administration showed. Analysts had expected inventories to remain unchanged.
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