Oil futures fell on Tuesday hitting 3 days of losses as the dollar gained and forecasts predict U.S. crude inventories rose last week meaning less demand.
The dollar index which follows the performance of the U.S. currency against other major currencies rose 1.1 percent today as better than expected manufacturing data in the United States was released by the Institute for Supply Management. The United States is the top consumer of oil in the world and the health of its economy has pressured crude prices.
More reasons for dollar gains were a report showing U.S. Chain store sales rose last week and a rising in cash of UBS Lehman Brothers, indicating credit markets in the United States could ease.
Crude prices denominated in dollars tend to increase when the U.S. currency falls because it makes futures cheaper for investors who use other currencies to buy.
Crude prices declined 0.53 cents or 0.52 percent to $101.05 a barrel on the New York Mercantile Exchange. On Tuesday prices fell as low as $99.55 a barrel, according to Bloomberg. The highest record for crude this year is $111.80 on March 17.
Brent crude fell 0.06 cents or 0.06 percent to $100.29 a barrel on the London Metal Exchange.
Supporting prices, economist forecast U.S. crude inventories –to be reported tomorrow- increased last week from an average from 2.3 to 2.6 million barrels according to surveys.