U.S. crude oil futures fell on Thursday, finishing a volatile open outcry session lower as traders weighed the effect of lower demand and the direction of the dollar, causing seesaw trading.
On the New York Mercantile Exchange, May crude
London Brent crude also declined.
The losses came in choppy trading after U.S. data showed jobless claims the highest since 2005, stoking fears of a significant economic slowdown.
U.S. oil demand so far this year is lagging last year's consumption as soaring prices add pressure to consumers already hobbled by a credit crunch and housing slump.
"With the U.S. apparently sliding into a recession, oil market rallies will probably not derive as much strength from gasoline this year," Jan Stuart, economist with UBS, said in a research note.
Thursday's losses were tempered by weakness in the U.S. dollar, which has underpinned a boom across all commodities denominated in the currency in recent months.
Earlier Thursday, U.S. crude fell as low as $103.21.
A report from the U.S. Energy Information Administration released Wednesday showed nationwide crude stockpiles rose sharply last week, while slow production from domestic refineries cut into fuels like gasoline and diesel.
The data also showed average implied oil demand in the United States over the first 13 weeks of the year down more than 479,000 barrels per day (bpd) compared to a year ago.
Some analysts said demand was expected to remain weak as Federal Reserve Chairman Ben Bernanke on Wednesday conceded for the first time that the U.S. economy may fall into recession in the first half of 2008.
In Nigeria, a fire at the country's major oil export pipeline kept burning for a fifth day.
The operator, a Royal Dutch Shell venture, said output and exports were unaffected.
Similar pipeline fires at Shell's pipeline last year led to partial losses of supplies from Africa's largest oil exporter.