NEW YORK (MarketWatch) - Crude-oil futures dropped 3% Tuesday, falling for the first time in three sessions as the U.S. dollar rose to the highest against the euro in 19 months, pushing down dollar-denominated oil prices.
Crude for November delivery fell $2.25 to $72 a barrel in early electronic trading. The November contract expires Tuesday. December crude fell $1.88, or 2.5%, to $72.51.
The euro continued to lose ground against the dollar Tuesday, trading as low as $1.3174, the weakest since March, 2007. The dollar was also higher against the British pound.
A stronger dollar tends to apply downward pressures on dollar-denominated commodities prices. Gold futures, which are denominated in the greenback, also moved lower.
Crude had been rising in the previous two sessions on speculation that the Organization of the Petroleum Exporting Countries is poised to cut its production to shore up oil prices.
OPEC should order a "substantial" cut in oil output at its emergency meeting Friday in Vienna, OPEC President Chakib Khelil said over the weekend, according to media reports. Khelil is also Algeria's energy minister.
Pressures have been mounting within the 13-member group, which controls 40% of the world's oil production, to cut production as crude prices have slumped by about 50% from the all-time high of $147.27 a barrel hit in July.
Edward Meir, an energy analyst at MF Global, estimated that the cartel may cut output by one million to two million barrels a day. He also pointed out that the group's efforts to boost oil prices may not be successful.
"For one thing, the cartel's track record in 'managing' production in a falling market has not been a good one," wrote Meir in a note. "More importantly, a cut of about 2 million barrels a day will only offset the amount of U.S. demand that has been lost on a year-over-year basis."
In other energy futures, November heating oil fell 1.99 cents, or 0.9%, to $2.19 a gallon, and November natural-gas futures slid slightly to $6.7350 per million British thermal units.
November reformulated gasoline fell 4.01 cents, or 2.3%, to $1.68 a gallon.
At gasoline retailers, prices fell more than 3 cents a gallon, hitting a national average of $2.889 Tuesday, according to auto club AAA.
