LONDON - Oil prices slipped back from three-month highs towards $US81 as stock markets consolidated ahead of key US economic data.
Benchmark US oil futures rose 3 per cent on Monday to above $US80 per barrel for the first time since early May after trading between $US70 and $US80 for almost two months.
Oil was supported by upbeat manufacturing data from industrialised economies including the United States and European bank results, which also boosted Wall Street.
But investors were wary after the sharp run-up and ahead of key data this week. US pending homes sales and weekly retail sales figures will be published later on Tuesday and all eyes will be on US non-farm payrolls figures on Friday.
US September crude slipped 14 cents to $US81.20 by 0915 GMT after hitting an intra-day high of $US81.62. ICE Brent fell 6 cents to $US80.76.
"We moved up too far, too fast yesterday and we are now settling," global oil analyst at Credit Agricole, Christophe Barret said.
"I expect we will go back into the $US75 to $US80 range because fundamentals don't support the recent rise."
Asian shares rose to their highest levels in nearly three months on Tuesday, after the euro reached a three-month peak on the back of data showing the US manufacturing sector grew in July for a 12th consecutive month, topping expectations.
But European stocks drifted in early trade and US stocks were expected to open lower.
A weaker dollar helps make oil imports cheaper for non US currency holders.
Supplies and hurricanes
The oil market's attention will turn to US inventories later on Tuesday, when the American Petroleum Institute will publish industry stockpile figures. Government statistics on supply and demand will follow from the US Energy Information Administration on Wednesday.
US crude oil inventories probably fell last week as imports slipped and the effect of Gulf of Mexico production was interrupted briefly by Tropical Storm Bonnie, a Reuters preliminary survey of analysts on Monday showed.
Averaging nine analyst views, crude inventories were expected to have fallen 1 million barrels in the week to July 30, Monday's survey showed.
Supplies of distillates including diesel were forecast to have increased 1.1 million barrels, while gasoline stocks were expected to have fallen 700,000 barrels, breaking a string of five weeks of gains despite peak consumption during the summer driving season.
A drop in US crude stockpiles would follow a jump of 7.3 million barrels to 360.8 million barrels in the week to July 23, the biggest since 2008, according to last week's EIA report.
Last week inventories were also expected to drop because of Bonnie-related disruptions to shipping and production.
Tropical Depression 4, which formed in the middle of the Atlantic Ocean on Monday, was becoming better organised and nearing tropical storm strength, the US National Hurricane Center said, but it was forecast to veer northeast before reaching Florida.
The hurricane season is entering what in recent years has been a period of peak activity between August and early October. Atlantic storms sometimes enter the Gulf of Mexico, posing a threat to US and Mexican oil infrastructure.
