US oil futures closed slightly higher in volatile trading on Thursday as traders tried to discern market direction a day after the biggest rally in two months amid continuous builds in crude supply.
Crude markets pared earlier gains in the session as disappointing U.S. economic data curbed investor enthusiasm after Wednesday's 6-percent price spike.
A falling dollar, however, limited the downside, as commodities priced in the greenback, including oil, became more affordable for users of the euro and other currencies.
U.S. crude futures settled up 12 cents, or 0.26 percent, at $46.06 per barrel after trading between $45.16 and $46.79. It had rallied nearly $3 rally in the previous session.
Brent crude was down 27 cents at $48.78 a barrel, having traded between $48.17 and $49.38.