Oil prices reversed the previous session's losses and closed higher Tuesday, as the dollar slid against its European counterpart.
The euro strengthened after Standard & Poor's affirmed Greece's rating of BBB+ for long-term credit and European finance ministers backed emergency support plans for the debt-laden nation.
Light, sweet crude oil for delivery in April settled $1.90 higher at $81.70 per barrel in the New York Mercantile Exchange, after losing 2.8% in the previous two sessions.
Later in the day, the Federal Reserve once again left its benchmark interest rate unchanged, with the central bank still seeing a weak economy as a bigger threat than inflation.
Traders are awaiting the result of Wednesday's OPEC meeting at Vienna, where the cartel is expected to announce its oil output targets unchanged.
Tuesday's economic releases from the US were also supportive for oil prices, with housing starts and building permits falling less than expected. Economic recovery is considered to boost demand for oil.
US housing starts fell 5.9% in February to an annual rate of 575,000 from the revised estimate of 611,000 for the previous month, the Commerce Department reported Tuesday. Economists were expecting a decline to 570,000 from the 591,000 originally reported for January.
The Commerce Department also said US building permits fell by 1.6% to an annual rate of 612,000 in February from 622,000 in January, less steep than the expected fall to 601,000.
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