Crude futures lost steam after rising more than 4 percent on Thursday on the strength of equity markets and as a respite in bad news out of China and the potential for more European monetary easing added to risk taking in oil.
But stock market rally faded in afternoon trading. Oil prices had come off the morning's highs by noon, likely factoring in the prevailing weak fundamentals for crude after Wednesday's data showing a big build in weekly U.S. inventories.
U.S. crude's front-month closed up 1 percent, at $46.75 a barrel. The front-month contract in Brent, the global benchmark for oil futures, briefly turned negative and was up 27 cents at $50.80 a barrel. It had risen more than $2 earlier in the day.
"You can call it a risk on day," said Tariq Zahir, a trader in crude oil spreads at Tyche Capital Advisors in Laurel Hollow, New York. "It's reminiscent of yesterday's action when crude moved up with equity markets even when fundamentals were weak."