Oil prices fell to near $82 a barrel Thursday, paring two days of gains that were fueled by signs U.S. crude demand may be improving.
By early afternoon in Europe, benchmark crude for April delivery was down 59 cents to $82.34 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.23 to settle at $82.93 on Wednesday.
Oil had risen more than $3 the previous two days, helped higher by a larger-than-expected drop in gasoline and distillates inventories last week and a smaller-than-expected increase in crude supplies, according to Energy Information Agency data released Wednesday.
The 12-nation Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global crude output, said Wednesday at a quarterly meeting in Vienna that it would maintain the group's production quotas.
"OPEC ministers are fairly relaxed with the situation right now and are comfortable to float along with the positive and improving data flow," Barclays Capital said in a report.
Some analysts said that OPEC would soon have to deal with members' poor compliance with agreed output quotas, as they tend to produce more than their target figures.
"The cartel has to be pleased that its poor record on overall compliance has been masked by improving demand prospects," said Edward Meir, senior commodity analyst at MF Global in New York. "However, we are entering the seasonally weaker second quarter, so the cartel may have its work cut out for it as demand starts to tail off."
Oil prices also continued to reflect changes in the dollar's exchange rate, with a stronger dollar pushing crude down by making the product more expensive for investors holding other currencies.
The euro fell to $1.3670 Thursday from $1.3753 late Wednesday in New York, while the British pound was down to $1.5275 from $1.5329.
In other Nymex trading in April contracts, heating oil fell 1.73 cents to $2.122 a gallon, and gasoline dropped 1.73 cents to $2.2924 a gallon. Natural gas slid 4.6 cents to $4.257 per 1,000 cubic feet.
In London, Brent crude was down 64 cents at $81.32 on the ICE futures exchange.
