Oil fell below $80 a barrel on Thursday, after a steep decline in U.S. crude inventories sent prices up 1 percent the previous day, as traders look to the fall in equities markets to take profits despite the weak dollar.

The U.S. dollar was moving towards recent multi-month lows on a basket of currencies on Thursday, after the U.S. Federal Reserve reiterated its commitment to keep rates low for months to come, but this did not help to lift oil.

U.S. crude for December fell 61 cents to $79.79 a barrel by 0339 GMT, after settling up 80 cents on Wednesday.

London Brent crude lost 59 cents to $78.30 a barrel. "Today the market is down a little bit as we get a bit of a correction, after two days of fairly big gains," said Tony Nunan, risk manager at Tokyo-based Mitsubishi Corp.

Crude oil futures rose above $81 a barrel on Wednesday after the U.S. government Energy Information Administration (EIA) data showed a big drop of 4 million barrels, in the week to Oct. 30, versus analysts expectations for an increase.

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