Front-month US crude for June delivery dipped 27 cents to $75.38 a barrel, at 12:50 p.m. EDT (1650 GMT), having hit $73.62, the lowest since Feb. 12.
June's discount to July US crude, had widened in early trading due to rising inventories at the Cushing, Oklahoma delivery point for the New York Mercantile Exchange's oil futures contract. The spread widened to nearly $5 in early activity - its highest level since February 2009. - but then it narrowed as short-covering lifted the front month.
Rising global energy demand and hopes Europe can get its debt crisis under control have supported Brent rise for three of the last four days. US crude prices have fallen for seven of the last eight sessions.
Industry data provider Genscape said crude at the Cushing, Oklahoma, hub rose by 1.2 million barrels to a record 38.96 million barrels in the week to May 11, the seventh straight week of gains.
Meanwhile, the euro slid to a one-week low against the US dollar and global stocks faltered on Thursday over worries that growth in Europe will slow due to belt-tightening and on anemic US jobs data.
US Treasuries rose as losses in the euro and a struggling Wall Street enhanced the allure of safe-haven government debt.
The euro was off 0.41 percent at $1.2569, after earlier falling to a low of $1.2540.
MSCI's benchmark all-country world equity index rose 0.22 percent.
On Wall Street, the Dow Jones industrial average was down 21.99 points, or 0.20 percent, at 10,874.92. The Standard & Poor's 500 Index was down 4.23 points, or 0.36 percent, at 1,167.44. The Nasdaq Composite Index was down 13.10 points, or 0.54 percent, at 2,411.92.
European shares ended slightly higher, with strong earnings from telecoms provider BT and grocer Sainsbury offsetting rising concerns that fiscal tightening in Europe could slow the region's growth.
The FTSEurofirst 300 index of top European shares closed 0.1 percent higher at 1,049.89 points after bobbing higher and lower throughout a volatile session.
Skepticism among some market participants that the European rescue package will even work darkened worries over the hit a recovering global economy will take from belt-tightening.
"People think that equities could blow any minute. Watch the euro and if it doesn't hold $1.25, which has been huge support, there is going to be chaos," said James Combias, head of government bond trading at Mizuho Securities USA in New York.
Portugal's measures announced on Thursday are the latest in a coordinated push in the euro zone that has so far calmed the worst fears of Greek-style debt contagion spreading in Europe.
The euro zone's debt debacle has been a boon for safe-haven bonds recently, with investor nerves still frayed despite a 750 billion euro ($950 billion) rescue plan agreed to over the weekend and tough budget talk from Portugal and Spain.
The 30-year US long bond rose 14/32 in price to yield 4.45 percent, while the benchmark 10-year US Treasury note was up 6/32 price to yield 3.55 percent.
The dollar was up against a basket of major currencies, with the US Dollar Index up 0.36 percent at 85.134.
Against the yen, the dollar was down 0.55 percent at 92.66.
