Updated from 10:08 a.m. EDT

Oil prices edged back below $41 a barrel Thursday after making another run at $42 a barrel, but there was no indication that market worries about supply had eased.

The benchmark U.S. crude closed down 59 cents, or 1.5%, at $40.92, having risen as high as $41.70 earlier in the day.

Oil prices Wednesday erased early losses to close sharply higher, after snapping a four-session run of record highs Tuesday. Prices hit a record $41.85 last week.

The Department of Energy Wednesday said oil inventories were down 1.1 million barrels, or 0.4%, for the week ended May 14 but gasoline production was up 1.2 million, or 0.6%. Imports rose by 980,000 barrels, or 1%. The modest increase in gasoline inventories was taken as a bullish sign by speculators.

Peter Schiff, president of Europacific Capital, an investment firm in Newport Beach, Calif., says prices could settle around $40 a barrel as a platform for further increases.

"Forty dollars a barrel was something you used to see just with these spikes," he said.

Gasoline futures closed flat at 1.45 a gallon, following another new high yesterday, when prices surged more than 6 cents.

Energy prices have repeatedly hit record highs lately, as traders worry about supply because of the recent attacks on production facilities in the Middle East and the approach of the peak summer driving season. Crude oil prices last week closed above $41 for the first time in the history of trading on the New York Mercantile Exchange, surpassing the previous high set in October 1990 when Iraq occupied Kuwait.

Saudi Arabia recently called on the Organization of the Petroleum Exporting Countries to increase production by about 6% to head off any possible damage to world economic growth, but traders have largely discounted any benefit from that because cartel members are already producing above their official quotas.

OPEC meets later this week with key oil-consuming nations to discuss market conditions.

Schiff said he expected little to result from the planned meeting.

"I think it's just a show," he said. "OPEC likes to maintain this fear in the marketplace that they have this spigot they can just turn on. I think OPEC doesn't really have any excess capacity to give."