Oil fell to about $75 a barrel today, paring earlier losses after comments by US Federal Reserve Chairman Ben Bernanke allayed fears that the central bank may raise interest rates, prompting the US dollar to drift lower.
US crude for January delivery fell 43 cents to $75.04 a barrel this evening, up from a low of $74.04 earlier.
Brent crude dipped 14 cents at $77.38 a barrel.
Strong US jobs data on Friday had fueled speculation that the Federal Reserve might raise interest rates sooner than expected.
But Bernanke warned that the US economy still has a long way to go before full recovery.
In early morning deals, the euro sank as low as $1.4756, the lowest point since early November. It later pulled back to $1.4814.
A strengthening dollar makes dollar-priced crude more expensive for buyers using other currencies. In turn, that tends to dampen oil demand and prices.
Before the weekend, crude futures had tumbled on Friday in volatile trading, succumbing to a strong dollar after news of a dramatic improvement in the troubled US labour market.
Official US data showed that job losses narrowed to 11,000 in November, a tenth fewer than in October, and the unemployment rate dipped to 10.0%.
That was the best official reading for job losses since December 2007 when the economy entered recession, raising hopes for a revival of US energy demand.
There were indications from OPEC that it was not going to cut production quotas at an upcoming meeting on December 22.
Saudi Arabia stated over the weekend that oil prices were 'perfect' and the global market was stable as Arab heavyweights in the OPEC cartel appeared united in their support for maintaining production quotas.
