$93 a barrel Friday ahead of quarterly growth figures for the world's biggest economy.
By early afternoon in Europe, benchmark oil for June delivery was down 62 cents to $93.02 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.21 to close at $93.64 on Thursday after the U.S. Labor Department said the number of Americans seeking unemployment benefits fell last week by 16,000, suggesting that layoffs have declined.
Traders turned slightly cautious ahead of first-quarter U.S. economic growth figures due later Friday. Economists expect to see a significant improvement from the anemic 0.4 percent growth rate reported for the October-December quarter.
But analysts at Credit Agricole CIB in Hong Kong said the result "is unlikely to allay market concerns after a recent run of disappointing data indicates some decline in growth momentum." Recent reports have suggested that manufacturing is starting to weaken. Sales of previously occupied U.S. homes dipped in March.
Still, if prices hold near their current level, the Nymex contract would record its largest weekly gain in 10 months, while narrowing the gap to the Brent contract to less than $10 a barrel.
"This is somewhat surprising given that U.S. crude oil stocks continue to be at just short of a 23-year high and U.S. oil production has meanwhile achieved a 21-year high," said analysts at Commerzbank in Frankfurt. "Without new U.S. pipeline capacities — which will not be available until the end of the year — any further narrowing of the price spread is difficult to justify."
Brent crude, which is used to price oil from the North Sea used by many U.S. refiners, was down 54 cents to $102.87 a barrel on the ICE futures exchange in London.
In other energy futures trading on the Nymex:
— Gasoline fell 1.14 cents to $2.7992 per gallon.
— Heating oil declined 1.32 cents to $2.8666 a gallon.
— Natural gas lost 0.5 cent to $4.162 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.