Updated from 1:56 p.m. EST
Oil prices erased early gains Thursday, closing sharply lower, after the benchmark U.S. crude moved closer to the high end of its recent trading range.
Light, sweet crude for March delivery closed down 79 cents to $47.54 a barrel in Nymex trading. Concerns about supply and demand, despite the end of the peak period of the heating oil season, pushed the futures contract close to $49 earlier.
The benchmark U.S. crude rose Wednesday after OPEC boosted its forecast of demand in 2005 by 5%. A mysterious blast near where Iran is building a nuclear reactor also spooked the market, offsetting somewhat bearish weekly U.S. inventory data.
Prices are approaching their 2005 high of $49.75 and are well above their low of the year of $45. Prices remain about 14% below their record high of more than $55 a barrel touched in October 2004.
OPEC's revised forecast comes about a month before members meet in Iran to discuss supply and demand issues. The cartel decided against a production cut at its last meeting, having already implanted a million-barrel-a-day cut in output on Jan. 1