Oil prices fell Wednesday as the dollar grew stronger and stocks slid on fresh concerns about what the Federal Reserve may do to help stimulate the economy.
Benchmark crude for December delivery fell 61 cents to settle at $81.94 a barrel on the New York Mercantile Exchange.
At the pump, gasoline prices dipped less than a penny overnight to $2.807 for a gallon of unleaded regular gasoline, according to a survey by AAA, Wright Express and Oil Price Information Service. The price is 2.4 cents lower than a week ago and 13.2 cents higher than a year ago.
The dollar was stronger after the Wall Street Journal reported the Fed next month may start buying Treasury bonds, but fewer and at a slower rate than many expected, as it moves to boost the economy with "quantitative easing."
"The market's been pushed higher for a month and half on all this talk of quantitative easing," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "In my mind, it's already been factored into price."
Stocks fell amid speculation about next week's Fed meeting and mixed earnings and economic reports.
The Dow Jones industrial average was down over 97 points by late afternoon. The Standard and Poor's 500 index and the Nasdaq composite index also fell.
Meanwhile, traders got mixed signals from the government's weekly oil and gasoline inventory report.
The Energy Department said commercial crude inventories rose 5 million barrels to 366.2 million barrels. That's much more than the 1.5 million barrel increase expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories fell 4.4 million barrels, the Energy Information Administration said.
Linda Rafield, Platts senior oil analyst, said oil supplies grew because imports rebounded. She said gasoline stocks shrank as implied demand rose from the previous week by 466,000 barrels a day to 9.358 million barrels per day. That level is normally seen in peak driving season. Implied demand is the amount of gasoline moving through the distribution system, not actual end consumption.
In other Nymex trading, heating oil slipped 1.17 cents to close at $2.2383 a gallon and gasoline rose 0.80 cent to $2.1020 a gallon. Natural gas lost 6.2 cents to close at $3.292 per 1,000 cubic feet. Wednesday was the last trading day for the November natural gas contract, and most interest shifted to the December contract, which settled 0.3 cent lower at $3.763 per 1,000 cubic feet.
In London, Brent crude fell 43 cents to settle at $83.23 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Hungary and Alex Kennedy in Singapore contributed to this report.