By Alison Sider and David Hodari 

Oil prices were mixed Wednesday as the U.S. dollar rallied and investors anticipated data expected to show another increase in U.S. crude output.

U.S. crude futures snapped a four-session streak of gains, settling down 11 cents, or 0.18%, to $61.68 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 17 cents, or 0.26%, to $65.42 a barrel on ICE Futures Europe.

Oil prices surged at the start of the year before pulling back along with equity markets. But prices recently have been locked in a relatively tight band.

"From a fundamental point of view it's been kind of a nothing sandwich -- OPEC production is still low, everyone is still worried about U.S. production growth," said John Saucer, vice president of research and analysis at Mobius Risk Group.

Prices are being pulled in two directions, with recent comments from the Organization of the Petroleum Exporting Countries showing commitment to ongoing production cuts giving support, while rising forecasts for U.S. shale output provide pressure, said Harry Tchilinguirian, global head of commodity market strategy at BNP Paribas.

"Oil prices are down but they're still trading in their recent price range," Mr. Tchilinguirian said.

Currency moves were the key driver behind the falling prices Wednesday.

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was last up 0.43%, and it has clawed back much of this year's losses in recent days. Analysts pointed to rising U.S. 10-year Treasury yields as a factor behind the dollar's rally so far this week.

"Oil prices are likely to slide for as long as the U.S. dollar appreciates, especially since fundamental data also point more towards falling prices," analysts at Commerzbank said in a note.

The dollar rally added to the factors weighing on oil prices since data last week showed record high U.S. shale oil production. The International Energy Agency's closely watched monthly report indicated that U.S. shale output is growing faster in 2018 than ever before. Analysts and investors are anticipating another increase in U.S. output when data from the U.S. Energy Information Administration is released Thursday, raising concerns that new production from shale will overwhelm the market again.

"We've heard guesses that production up again," said James Burr, senior vice president, energy, at INTL FCStone Financial Inc. "I think [prices are] just floundering right now until tomorrow's report."

U.S. Deputy Energy Secretary Dan Brouillette's remark Tuesday that America's oil output is on track for "phenomenal" growth this year, may concern some investors, with "a tsunami of U.S. shale oil [being] bearish," Mr. Tchilinguirian said.

At the same time, investors also weighed competing long-term demand forecasts. Oil giant BP PLC said this week that it expects demand to peak in the next two decades, while the International Energy Agency said it doesn't expect oil demand to top out before 2040.

Gasoline futures rose 0.7 cent, or 0.4%, to $1.7573 a gallon. Diesel futures rose 0.46 cent, or 0.24%, to $1.9323 a gallon.

On Thursday morning, the U.S. government releases its weekly inventory report, and analysts surveyed by the Wall Street Journal expect crude oil stockpiles to have risen by 1.9 million barrels last week.

The American Petroleum Institute, an industry group, said late Wednesday that its own data for the week showed a 900,000-barrel decrease in crude supplies, a 1.5-million-barrel rise in gasoline stocks and a 3.6-million-barrel decrease in distillate inventories, according to a market participant.

Write to Alison Sider at alison.sider@wsj.com and David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

February 21, 2018 17:07 ET (22:07 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.