By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude oil futures retreated in electronic trading Tuesday amid a stronger dollar, ahead of the release of a U.S. inventory report later in the day.
Crude for September delivery CL1U -0.57% shed 44 cents, or 0.5%, to trade at $87.47 a barrel on the New York Mercantile Exchange during Asian trading hours.
Oil posted a 2.9% gain during the North American session on Monday, with investors encouraged by a rise in U.S. stocks and a weaker dollar. Read more about Tuesday’s oil moves.
But the greenback strengthened Tuesday, which tends to discourage investment in dollar-priced commodities such as oil.
The dollar index DXY +0.02% , which measures the performance of the greenback against a basket of six currencies, traded at 73.901, up from 73.836 in late North American trading Monday. Read more about currencies.
Later Tuesday the American Petroleum Institute will deliver its weekly inventory report, followed by the more closely watched U.S. Energy Information Administration (EIA) report on Wednesday.
Analysts polled by Platts forecast a drop of about 500,000 barrels in U.S. commercial crude oil stocks for the week ended August 12.
Gasoline inventories are projected to fall by 2.3 million barrels, while middle distillate stocks will build 700,000 barrels, according to Platts.
Last week the EIA reported a surprise 5.2 million barrel fall in crude inventories, contributing to a 4.5% spike in oil prices, in the wake of the report.
Virginia Harrison is a MarketWatch reporter based in Sydney.
