Oil prices extended losses in Asian trade today on US demand worries after a government inventory report showed a surge in crude stocks in the world's largest energy consumer, analysts said.
New York's main contract, light sweet crude for May delivery, dropped 31 cents to $80.30 a barrel. The contract had shed $1.30 in yesterday's trade.
Brent North Sea crude for May was down 27 cents to $79.35 a barrel.
The US Department of Energy said in its weekly inventory report yesterday crude oil inventories rose by 7.2 million barrels last week, confounding expectations of an increase of 1.7 million barrels.
"Primarily, the market is responding to the report which showed a very substantial increase in crude oil inventory over the past week," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
Oil was also under pressure from "the continued volatility of the US dollar versus the euro" amid heightened fears over the debt crisis engulfing Greece and Portugal that has sent the euro dipping lower this week, said Shum.
A strengthening greenback makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand.
Oil prices had earlier reached $82 before tumbling as the euro fell on mounting speculation the EU would ask the IMF to help bail out debt-ridden Greece in a sign of European weakness and a credit downgrade in Portugal.