By Georgi Kantchev 

LONDON--Global oil prices rose on Friday, supported by bullish market sentiment and a weaker dollar ahead of key U.S. oil drilling data.

The gains extended a recent rally which prompted some forecasters to raise their projections for oil prices this year. Some analysts, however, continue to warn that the recent rise in prices might not be sustainable given the large glut of oil on the global market.

Brent crude for delivery in June rose 1% to $65.55 a barrel on London's ICE Futures Exchange. Brent is up around 40% since its low in January this year.

On the New York Mercantile Exchange, June-dated light, sweet crude futures were little changed at $57.75 a barrel. Nymex crude has risen for 10 of the past 14 sessions to its highest levels since December.

"Many explanations can be found for the latest oil price increase: the weak U.S. dollar, the problems faced by investors due to low interest rates, ongoing fighting in Yemen and the (slight) decline in U.S. oil production," analysts at Commerzbank said in a note.

The dollar fell on Friday, providing a boost for dollar-priced commodities like oil which become more attractive for holders of other currencies as the greenback depreciates. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other major currencies, was down 0.4%.

Oil-field-services firm Baker Hughes will release its weekly U.S. oil rig count, a proxy for activity in the industry. The number of oil drilling rigs has declined for 19 straight weeks and stood at 734 last week, half the number just six months ago.

"On closer inspection, however, these factors ultimately reveal themselves to be 'soft' reasons," Commerzbank cautioned.

According to the bank, investors are discarding the risk of Iran and Libya returning to the oil market. If both countries were to regain their respective precrisis production quotas, the bank said, an increase in production of up to 2 million barrels a day would almost entirely offset the global demand growth over the next two years and increase the oversupply.

Still, the recent rally in oil prices prompted some analysts to upgrade their forecasts for oil prices.

Société Générale raised its Brent crude forecast for the year by $4.33 to $59.54 a barrel. It also raised its Nymex crude forecast for the year by $4.28 to $53.62 a barrel.

"We also have evidence that the global rebalancing process, taking place on the back of U.S. shale oil, is finally getting under way," SocGen's head of commodities research Michael Wittner said in a report.

However, it said oil prices in May and June will still be under pressure due to U.S. oil stockpiles rising by 1.9 million barrels a day in the second quarter.

Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 0.6% to $2.0083 a gallon, while ICE gas oil for May changed hands at $589.50 a metric ton, up $3.75 from Thursday's settlement.

Eric Yep in Singapore contributed to this article.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

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