By Neanda Salvaterra and Jenny W. Hsu 

Crude oil prices edged up Tuesday, amid bargain hunting and a weaker dollar, after falling to near four-month lows Monday.

Brent crude, the global oil benchmark, rose 0.77% to $51.14 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures traded 0.78% higher at $48.10 a barrel.

As prices neared the $50-a-barrel mark earlier in the day, firms that use oil, such as airlines or shipping firms, swooped to lock in future delivery prices.

"It's purely psychological. It's a very good nice round number for the calculations in their business," said Bjarne Schieldrop, the chief commodities analyst at SEB Markets.

A softer U.S. dollar also supported prices Tuesday. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, dipped overnight and then rose 0.03%. As oil is priced in dollars, it becomes more expensive for holders of other currencies as the greenback appreciates.

The decline in the dollar reflects investors' doubts over U.S. President Donald Trump's ability to deliver on his pro-growth campaign promises, said Barnabas Gan, an economist at Singapore bank OCBC.

Oil prices have faced selling pressure lately as rising crude production in the U.S. threatens to frustrate a continuing effort to reduce global stockpiles.

Experts say the attempt by the Organization of the Petroleum Exporting Countries and 11 outside suppliers' to cut their cumulative supply by 1.8 million barrels a day in the first six months of 2017 could be undermined by surging production in the U.S.

Data shows U.S. production has remained above 9 million barrels-a-day for the past four weeks. In the week ended March 24, U.S. drillers activated 21 more oil rigs, marking the 10th straight week the number have increased, making it a total of 652.

"We now forecast U.S. crude oil production to reach a multi-decade high by December, within sights of the all-time high reached in 1970," said Barclays analysts in a recent note.

Oil production and exports are also rising from Libya, an OPEC member exempted from the output cut deal.

Platts reported that Libya's National Oil Corp. shipped Sunday its first crude cargo of around 1 million barrels from the Es Sider oil terminal since the facility resumed operations after conflicts between the government and insurgents forced it to close.

Some analysts say OPEC is at risk of failing to make a dent in global inventories unless the cartel decides to extend its cuts into the second half of 2017 at its meeting May 25.

S&P Global Platts estimates U.S. crude stockpiles rose by 300,000 barrels in the week ended March 24. The firm expects gasoline and distillates stocks to show a drawdown of 2.1 million barrels and 1.1 million barrels, respectively. Official figures, including production rate, will be released on Wednesday by the U.S. Energy Information Administration.

Overall investors haven't abandoned all hope that OPEC's cuts will be successful.

Data from ICE showed that traders are largely holding on to their record-high speculative position that Brent prices will rise. According to ICE figures, speculative net long positions in Brent declined 8,200 to 397,700 contracts in the week to 21 March.

Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.68% to $1.64 a gallon. ICE gasoil changed hands at $455.25 a metric ton, up $4 from the previous settlement.

Write to Neanda Salvaterra at neanda.salvaterra@wsj.com and Jenny Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

March 28, 2017 08:08 ET (12:08 GMT)