Oil prices pared losses on Thursday, but still posted their first weekly loss in over a month, pressured by record high U.S. stockpiles, weakening equity markets, and a strong dollar. The number of oil rigs operating in the United States fell by 15 in the previous week, oilfield services firm Baker Hughes reported Thursday. The rig count rose last week after 12 weeks of cuts. With crude futures losing as much as 6 percent since Tuesday's settlement — their biggest slide in two days since mid-February — analysts said the oil rally of the past five weeks that brought prices up from mid-$20 levels may be unraveling. U.S. government data on Wednesday showed crude stockpiles jumped 9.4 million barrels last week, three times more than forecast by analysts in a Reuters poll. A senior executive from the International Energy Agency, meanwhile, said a deal among a few OPEC producers and Russia to freeze production was likely to be "meaningless" as Saudi Arabia was the only one with the ability to raise output.

Brent crude futures were down 2 cents at $40.45 a barrel. It recorded a nealry3-percent drop on the week, its biggest weekly slide since mid-January. U.S. crude futures settled down 33 cents, or 0.8 percent, at $39.46 a barrel. For the week, it lost about 5 percent, its first weekly loss since mid-February. The firming in crude prices came as the energy complex moved higher, with gasoline futures up about 0.75 percent. Earlier this week, both the benchmarks were up more than 50 percent from multi-year lows hit in January. "A dose of reality (has) derailed the current perception (of a) rally, at least for the time being," said Dominick Chirichella, analyst at New York's Energy Management Institute. Shares on Wall Street, trading in tandem with crude most of this year, headed for their first weekly drop in six weeks. Financial markets were broadly risk averse with volumes thin ahead of the Good Friday and Easter break.