Oil prices dropped slightly early on Thursday on expectations of higher global production amid forecasts for weak demand growth, while a firmer dollar also kept a lid on prices.

Oil rebounded on Wednesday on short-covering after prices fell near a two-week low in the prior session on OPEC's demand forecast cut, while the dollar hit a seven-month high, capping crude's gains. Brent crude futures were up 61 cents,

Oil prices on the New York fuel exchange are slightly rising, but they remain close to this month's lowest levels. Brokers say investors are focused on the fuel demand outlook after OPEC countries lowered their oil demand growth forecasts for this and next year.