Investing.com - Oil prices turned lower on Thursday, reversing early strong gains in a volatile trading session as a stronger dollar weighed.
Crude oil for June delivery on the New York Mercantile Exchange was down 79 cents or 1.81% at $43.36 a barrel at 1104ET, off early highs of $44.48, levels not seen since November.
Global benchmark Brent was down 84 cents at $44.97 on the ICE Futures Europe exchange, after hitting highs of $46.13 overnight.
The dollar firmed up after European Central Bank President Mario Draghi left the door open to further euro zone interest rate cuts to ensure inflation returns to target.
The comments sent the euro lower, sparking gains in the dollar.
The dollar received an additional boost after data showing that the number of Americans filing for initial jobless claims fell to a 43-year low last week.
The unexpectedly robust data raised the prospect that the Federal Reserve could raise interest rates sooner than previously expected.
Earlier Thursday oil prices rose to five month peaks after the International Energy Agency said it expects the oil market to rebalance from oversupply by next year, provided there is no major economic downturn.
IEA chief Fatih Birol said 2016 would see the biggest decline in non-OPEC oil supply in the last 25 years, which will help the market to come back into balance from oversupply.
Also Thursday, an official from the Organization of the Petroleum Exporting Countries said it will discuss freezing oil production at its next meeting in June.
The comments came after weekend talks between major oil producers collapsed without a deal to freeze output levels, intended to rein in ballooning over production and shore up prices.
Data on Wednesday showed that U.S. crude stockpiles increased by 2.08 million barrels last week and continued to hover near record highs.
But crude production continued to decline, falling to an average 8.95 million barrels per day from 8.98 million in the prior week. Production has now fallen in 11 out of the past 12 weeks as low prices continue to erode shale output.