Oil prices fell to their lowest levels in a month on Thursday as the dollar resumed a 10-day rally, making fuel more expensive for holders of other currencies.
The dollar spiked after a stronger-than-expected rise in U.S. pending homes sales in April, traders said.
"Much depends on the U.S. dollar," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
Front-month Brent was down 40 cents at $61.66 a barrel by 1410 GMT. It earlier hit an intra-day low of $61.40, its weakest since April 22.
WTI crude futures were down 70 cents from their last settlement at $56.81 per barrel.
Investors awaited data from the U.S. Energy Information Administration (EIA) to see how American oil production was responding to a recent surge in prices.
Industry group American Petroleum Institute (API) said on Wednesday that U.S. crude oil inventories rose by 1.3 million barrels last week, following three weeks of withdrawals.
If that is confirmed by EIA figures due at 11 a.m EDT (1500 GMT), it could mean U.S. shale oil production has begun to recover after a brief period of contraction, adding extra pressure to prices.
"The market is trying to anticipate what's going to happen tonight," Phillips Futures analyst Daniel Ang said.
Analysts said in a Reuters poll on Wednesday that crude stocks in the United States probably fell by 900,000 barrels last week, dropping for a fourth straight week.
U.S. crude received some support from Canadian wildfires that forced the evacuation of several oil and gas sands production sites on Wednesday.
The fires have caused energy companies operating in Alberta, the largest source of U.S. oil imports, to shut in 233,000 barrels per day of production, or roughly 10% of total Canadian oil sands output.