Crude oil fell on Thursday as players took profits from the past two days of gains, turning bearish after the dollar's rally against the euro on Greek debt worries weighed on demand for commodities.
The dollar's first resurgence in five days against a basket of currencies offset a positive outlook for oil from the International Energy Agency. A stronger dollar makes commodities denominated in the greenback, including oil, costlier for other currency users.
The euro extended losses after International Monetary Fund spokesman Gerry Rice said "major differences" remained with Greece over an agreement to save the country from bankruptcy. The IMF's technical team has returned from Brussels, where it had been talking with Greek officials, although the Fund remained "fully engaged" with Athens, Rice told reporters.
"Oil continues to slip and slide when it gets bad news out of Greece and moves higher when Greek hopes for a deal to avoid a Greek default are raised," said Phil Flynn, analyst at Chicago-based Price Futures Group.