Oil prices slipped slightly in seesaw trading Thursday as U.S. equities fell, again raising concern about the economy and a rebound in energy demand.

U.S. crude settled down 4 cents at $72.47 a barrel. London Brent futures slipped 12 cents to settle at $71.55.

Oil right now is not a leader but a follower, following stocks and the dollar. Oil seems like it wants to go down, but every time it tries to some data or the dollar's weakness keeps it supported, said Phil Flynn, analyst at PFGBest Research in Chicago.

Wall Street fell, weighed down by materials and financial shares as investors paused following a three-day climb. Initially the market was boosted by data showing factory activity in the U.S. Mid-Atlantic region rose in September to its highest level since June 2007.

Oil has tracked equities markets closely in recent months as dealers look to stocks as a leading indicator of an economic recovery that could boost ailing energy demand.

But analysts said weak fundamentals continued to limit oil's price gains.

The U.S. Energy Information Administration said on Wednesday that inventories of distillates in the world's top energy consumer rose more than expected last week to their highest since 1983.

Gasoline inventories also rose, while crude stockpiles fell as refiners ran their plants near 90 percent of capacity to produce fuel, according to the weekly report.

We see no current physical tightness or even an imminent shift to a supply/demand deficit to help push the market higher, said Citi analyst Timothy Evans in a research note, adding, Some of the barrels have simply been moved downstream.

The dollar fell broadly on Thursday, hitting a fresh one-year low against the euro as expectations of an economic recovery encouraged investors to seek higher-yielding assets, which had helped push oil higher in earlier trade.

A weaker dollar can fuel purchases of oil and other dollar-denominated commodities, as they become relatively less expensive to nondollar holding investors.

(Additional reporting by Richard Valdmanis, Gene Ramos and Robert Gibbons in New York, Sambit Mohanty and Emma Farge; Editing by Lisa Shumaker)