Oil prices fell below $82 a barrel Friday as traders remained cautious ahead of next week's Federal Reserve meeting and U.S. midterm elections. By early afternoon in Europe, benchmark oil for December delivery was down 54 cents to $81.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 24 cents to settle at $82.18 on Thursday. Crude has loitered near $82 this week, matching bobbing stock and currency markets, as traders wait to see how big the Fed's Treasury bond-buying program, known as quantitative easing, will be to help spur economic growth. 'The price of oil is still moving sideways around the $82 a barrel mark,' said analysts at Commerzbank in Frankfurt. 'The physical oversupply is preventing another rise toward $85 and the interest of financial investors is stopping prices from falling below $80.' Commodities have gained in recent weeks in anticipation the Fed measures will undermine the dollar further and make dollar-based assets cheaper for investors with other currencies. But the Fed must temper its desire to boost the economy with concern that higher commodity prices would spark inflation and eat away at corporate profits. 'Too aggressive a course of quantitative easing would launch commodities prices ever higher,' Cameron Hanover said in a report. 'Corporate profits had been one of the bright spots in an otherwise anemic economic recovery.' 'Almost everything depends on what the Fed does next Wednesday.' Traders will also be closely watching Friday reports about U.S. economic growth, consumer sentiment and manufacturing. Some analysts expect the Fed's move will push oil prices higher despite sluggish U.S. demand. Citigroup raised its three-month forecast to $85 from $74 and its 12-month estimate to $90 from $83. 'The prospect of quantitative easing, and the associated risk rally and dollar weakness, should support prices despite the downward pressure instigated by very high U.S. inventories,' Citigroup said. In other Nymex trading in November contracts, heating oil fell 0.96 cent to $2.2339 a gallon and gasoline dropped 0.67 cent to $2.1072 a gallon. Natural gas gained 4.6 cents to $3.936 per 1,000 cubic feet. In London, Brent crude fell 36 cents to $83.23 a barrel on the ICE Futures exchange. ------ Associated Press writer 