Oil down about 2 percent, rally cut short by dollar and Greek worry

NEW YORK (Reuters) - Crude oil fell almost 2 percent 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.

A positive outlook for oil from the International Energy Agency was offset by the dollar's first resurgence in five days against a basket of currencies . 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.

Brent crude was down $1.10, or 1.6 percent, at $64.60 a barrel by 11:30 a.m. EST.

U.S. crude was down $1.05, or 1.7 percent, at $60.38.

Crude prices had jumped about 5 percent over the past two days, rallying ahead and after bullish weekly stock draws data from the U.S. government.

The IEA, which coordinates energy policy for industrial nations, raised its projection for global oil demand growth in 2015 by 280,000 barrels per day (bpd) to 1.4 million bpd, bringing demand this year to almost 94 million bpd.

The agency said that unexpectedly strong global oil demand growth had been supporting oil prices and raised its estimate for world demand for crude from the Organization of the Petroleum Exporting Countries, or OPEC, this year.

Even so, the World Bank cut its global growth outlook for this year and urged countries to "fasten their seat belts" as they adjust to lower commodity prices and a looming rise in U.S. interest rates.

In its twice-yearly Global Economic Prospects report, the World Bank predicted that the global economy would expand by 2.8 percent this year, below its 3 percent outlook in January.

(Additinal reporting by Vladimir Soldatkin in London and Henning Gloystein in Singapore; Editing by David Goodman and Chris Reese)