Oil rose on Thursday as a drop in the dollar outweighed rising U.S. inventories and economic concerns.

U.S. crude rose 14 cents to $48.99 a barrel by 1:53 p.m. EDT. London Brent crude traded down 21 cents at $49.60 a barrel.

The euro gained against the dollar as demand rose on better-than-expected earnings results from banks and as data on euro zone industrial new orders showed a smaller-than-expected decrease.

A falling dollar can boost the appeal of oil and commodities to investors as an inflation hedge.

The European purchasing number gave the dollar some weakness, said Phil Flynn, analyst for Alaron Trading in Chicago, adding: That's keeping us held in there today.

Oil's gains came despite swelling U.S. crude inventories, which hit a fresh 19-year high last week, according to U.S. government data released on Wednesday.

I'd say we don't have to worry about tight supplies any time soon, said Flynn.

U.S. stocks were little changed on Thursday as disappointing economic data and outlooks from bellwethers like UPS were offset by a rise in regional banks.

The pace of sales of existing homes in the United States fell 3.0 percent in March to a lower-than-expected annual rate of 4.57 million units, the National Association of Realtors said on Thursday.

The number of people claiming benefits after drawing an initial week of aid in the United States vaulted to another record high in early April, for the 14th consecutive week, the Labor Department said.

The slumping economy has clipped fuel demand and dragged oil prices off record highs over $147 a barrel hit in July.

(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos in New York, Christopher Johnson, Alex Lawler and Barbara Lewis in London and Chua Baizhen in Singapore; Editing by Christian Wiessner)