Oil prices deepened losses toward $55 a barrel today as OPEC deliberated a second supply increase to cool spiralling prices and a recovering dollar lured some fund money out of commodities.
The US dollar held near a one-month high against the euro today, boosted by the Federal Reserve's decision to raise interest rates by a quarter percentage point to 2.75 per cent.
US light crude traded down 43 cents to $55.60 a barrel, slipping further from the record $57.60 struck last week after a 2.5 per cent drop yesterday on speculative profit-taking.
Brent crude oil fell 24 cents to $54.35 a barrel. But brokers and traders said the market's bullish sentiment was intact, with prices up nearly 28 per cent from the start of the year as booming demand in the United States and China threatens to strain global production capacity.
The market will be watching US government data due out later today today, expected to show commercial crude stocks rising but product inventories in decline as many refiners are still shut for maintenance and demand remains firm.