Crude oil prices turned lower on Thursday in volatile trade after rising more than $1 a barrel, as lift from a weak dollar gave way to worries about the oil demand outlook.

Prices had rallied in early trade as the dollar weakened following U.S. data showing that economic growth slowed in the first quarter and jobless benefit claims rose unexpected last week.

That data reinforced expectations that the U.S. Federal Reserve would maintain its easy monetary policy to support the still slow pace of economic recovery.

U.S. crude for June delivery dropped 10 cents to $112.66 a barrel. It had jumped as high as $113.97, the highest intraday price since September 2008.

In London, ICE Brent June crude slid 18 cents to $124.95 a barrel, after hitting $126.66, near its highest level of 2011 of $127.02, reached on April 11.

U.S. crude stalled under $114 and Brent before it got to $127 and the dollar pared some of its losses so crude came right back down, said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.

The U.S. Energy Information Administration said that U.S. oil demand in February was 762,000 barrels per day less than previously estimated, though still up 9,000 bpd from a year earlier.

The economic growth of the United States, the world's biggest oil consumer, slowed in the first quarter as higher food and gasoline prices sent inflation rising to its fastest pace in 2-1/2 years.

Also, the number of Americans seeking jobless relief unexpectedly rose last week, inspiring more worries about the economy.

Both data sent the U.S. dollar to a three-year low against major currencies, a factor that boosted oil prices in early trade by increasing the attractiveness of oil and other commodities as an alternative asset.

(Reporting by Gene Ramos and Robert Gibbons; Editing by David Gregorio)