Oil prices fell to their lowest levels in a month on Thursday as the dollar resumed a 10-day rally, making fuel more expensive for holders of other currencies.

The dollar has risen more than 4 percent against a basket of currencies .DXY over the last 10 days, helping accelerate a fall in oil prices from a five-month high early in May.

The dollar spiked after a stronger-than-expected rise in U.S. pending homes sales in April, traders said.

"Much depends on the U.S. dollar," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.

Front-month Brent LCOc1 was down 40 cents at $61.66 a barrel by 1410 GMT. It earlier hit an intra-day low of $61.40, its weakest since April 22.

U.S. crude futures CLc1 were down 70 cents from their last settlement at $56.81 per barrel.

Investors awaited data from the U.S. Energy Information Administration (EIA) to see how American oil production was responding to a recent surge in prices.

Industry group American Petroleum Institute (API) said on Wednesday that U.S. crude oil inventories rose by 1.3 million barrels last week, following three weeks of withdrawals. [API/S]

If that is confirmed by EIA figures due at 11 a.m EDT (1500 GMT), it could mean U.S. shale oil production has begun to recover after a brief period of contraction, adding extra pressure to prices.