LONDON: Oil prices fell on Wednesday as a stronger dollar offset rising demand for heating fuel caused by cold weather in the northern hemisphere, analysts said.

New York's main futures contract, light sweet crude for delivery in February, was down 10 cents to 81.67 dollars a barrel.

Brent North Sea crude for February delivery shed 17 cents to 80.42 dollars in early London trading.

"Positive market sentiment from the continued cold weather across the US and Europe was partly offset by a firmer US dollar," said analysts at Commonwealth Bank of Australia.

A stronger US unit makes dollar-denominated oil more expensive to holders of other currencies, dampening demand and leading to lower prices.

Cold weather in the United States and Europe had been driving prices higher because of strong demand for heating fuel.

But independent oil analyst Ellis Eckland said the US cold snap is easing up.

The cold weather is "definitively adding to oil demand, but the American weather looks like it is going to ease up, so it's slightly bearish for oil," he said.