US oil settles up 17 cents, or 0.3%, at $57.68 a barrel

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U.S. oil scored modest gains on Thursday on news that U.S. crude stocks fell for a fourth week, suggesting the U.S. market was rebalancing after a long period of oversupply.

U.S. crude closed up 17 cents, or 0.3 percent, at $57.68 a barrel. was 40 cents higher at $62.50 a barrel, after earlier reaching an intra-day low of $61.24, its weakest level since mid-April.

Data from the Energy Information Administration on Thursday showed crude oil inventories fell by 2.8 million barrels in the last week, compared with analysts' expectations for an decrease of 857,000 barrels.

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The figures helped support a market that has come under heavy pressure due to a 10-day rally in the dollar, which makes fuel more expensive for holders of other currencies.

The dollar has risen more than 4 percent against a basket of currencies over the last 10 days, helping accelerate a fall in oil prices from a five-month high early in May.

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Meanwhile, weekly U.S. crude oil production rose to 9.56 million barrels per day, its highest in 44 years. The high level of production shows that the U.S. industry continues to be resilient, and while drillers may have cut back on new wells, they continue to find efficiencies, Andrew Lipow of Lipow Oil Associates said.

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"As the industry went through the first quarter we really haven't seen the effect of declining rig counts," he said.

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 percent of total Canadian oil sands output.

—CNBC's Patti Domm and Tom DiChristopher contributed to this story.