Oil fell more than 2% today toward $82 a barrel after investors concerned about the Greek debt crisis and rising US crude inventories pulled cash out of energy markets in a flight from risk.
Standard & Poor's cut Greece's credit rating to junk status minutes after downgrading Portugal. Concerns surrounding debt-laden European economies have led to a bearish outlook for fuel demand in a key consumption region.
The euro extended losses versus the dollar following the downgrades.
A firming dollar can weaken crude, priced in dollars, by making it more costly for holders of foreign currencies.
US crude for June delivery fell $1.88 to $82.32 a barrel this afternoon, while London's Brent crude for June traded down $1.19 at $85.64.
A new report due tomorrow is expected to show that US crude stocks rose for a second week last week, by 400,000 barrels a day, as refinery demand slumped.
Crude inventories in the US Midwest region are already at their highest levels in at least two decades, according to US Energy Information Administration data.
