Oil dipped below $82 a barrel this evening after a two-day rally, as the US dollar strengthened against the euro and OPEC did not take strong steps to tighten supplies above its official output cap.
US crude fell $1.03 cents to $81.90 a barrel, while Brent crude lost 79 cents to $81.17.
Prices had shot up by more than $3 in the previous two days due to larger than expected decreases in fuel inventories in the US and strong US petrol demand, which rose to a record high for the month of February.
Ministers from the Organisation of Petroleum Exporting Countries (OPEC) agreed on Wednesday to maintain the official existing cuts of 4.2 million barrels per day. But some member countries have been pumping oil above their output targets.
OPEC's Secretary General said the group did not push member countries about the compliance too much at the meeting and the oil minister of Saudi Arabia, its largest producer, said he was 'very happy' with 'beautiful prices'.
The group is even likely to continue to leave its oil output quotas unchanged at its next meeting in October, Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told Reuters today.
Meanwhile, the dollar gained against the euro as the single currency was hit by continuing uncertainty over the Greek debt crisis. A stronger dollar pressures oil and commodity prices by making them more expensive for users of other currencies.
