Oil edged down on Tuesday, on course for its fifth consecutive fall and longest losing streak since February, on worries about the economy that have brought the stock market rally to a halt and pushed the dollar higher.
China's economy has been resilient in the face of a global downturn, a poll of economists ahead of next week's GDP numbers shows, but recent economic data has painted a grim picture for the world's developed economies.
Asian stocks edged up slightly on Tuesday after a slide the previous day, while the yen held gains against higher-yielding currencies as investors doubt the speed of the global economy's recovery.
The market could find more direction from the American Petroleum Institute's weekly crude and products stocks data to be released at 2030 GMT, expected to show a fall in crude and a rise in product stocks.
U.S. light crude for August delivery fell 16 cents to $63.89 a barrel by 0646 GMT (2:46 a.m. EDT), having settled down 4 percent on Monday at $64.05, its lowest settlement in more than a month.
London Brent crude was down 16 cents at $63.89.
At times like this in the cycle where people are still unsure about the outlook, they are more likely to buy U.S. Treasuries and that kind of investment and that is causing a bit of upward pressure on the dollar and a bit of downward pressure on oil prices, said Ben Westmore, commodities analyst at National Australia Bank.
A bleak U.S. jobs report last week has prompted portfolio managers to reassess how quickly economies around the world can return to growth after the deep recession, spurring a pull-back in shares and currencies such as the Australian dollar.
Oil prices have fallen 8 percent since the beginning of July after having doubled from lows below $33 hit last December on economic optimism in the second quarter that has since fizzled out.
Growing unrest in Nigeria, where militants have launched at least four attacks against oil installations in the past 10 days, put a floor on falling prices in the past few weeks.
But it failed to push prices higher on Monday when the main militant group said it had sabotaged a Chevron
Analysts polled by Reuters predicted U.S. crude oil inventories fell last week for the fifth week in a row by 2.2 million barrels on average, while they expected gasoline stocks to have gained 800,000 barrels and distillate inventories 1.7 million barrels.
The Energy Information Administration (EIA) will also release its monthly report later on Tuesday. Last month, the EIA raised its forecast for 2009 world demand by 10,000 barrels per day (bpd) to 83.68 million bpd, the first time since September that it had increased the demand estimate in its rolling monthly forecast.
(Editing by Ben Tan)