Oil fell to around $70 a barrel on Tuesday, pressured by a stronger U.S. dollar and falling equities after weak U.S. consumer confidence data.
U.S. crude for August delivery fell $1.24 to $70.25 a barrel by 10:21 a.m. EDT, off an earlier eight-month high of $73.38.
Brent was down $1.46 cents to $69.53 a barrel.
The U.S. dollar rose against the euro on Tuesday, adding pressure to oil prices. A stronger dollar makes commodities denominated in the currency more expensive for investors.
Equity losses also weighed as U.S. and European stock markets fell following the fall in U.S. consumer confidence, raising thoughts of extended economic weakness and subdued demand for fuel.
Crude and oil products inventory numbers from the United States will be carefully watched on Tuesday and Wednesday for the latest indication of demand from the world's biggest fuel consumer.
A Reuters poll of analysts ahead of weekly data forecast U.S. crude stockpiles fell by 1.6 million barrels last week, while gasoline stocks were seen up 2 million barrels and distillate stocks rose 1.5 million barrels.
The American Petroleum Institute will release its weekly U.S. inventory at 4:30 p.m. EDT, while the U.S. Energy Information Administration report is due out on Wednesday.
Driven by hopes of a global economic recovery, oil prices are on track to post a near 50 percent increase in the second quarter, the highest quarterly percentage gain since 1990.
Oil has rallied on hopes for an improving economic outlook and a growing appetite for risk among investors, a factor given further impetus by Asian and U.S. stock market gains.
Earlier on Tuesday, oil prices surged on unusually high Asian trading volumes, which some traders attributed to big fund players in the market.
This could be end of quarter movement, and traders are trying to push prices higher and then selling before closing their books, said Mark Pervan, senior commodities analyst at ANZ Bank. I haven't seen any new catalyst on the news front.
(Editing by Keiron Henderson)