NEW YORK: In a surprising turnaround of events world oil prices continued to slip further down on stronger dollar and weaker demand.
Oil fell for a fourth day, dipping briefly below the $US100 mark as a stronger dollar, weaker demand and growing crude oil inventories extended a retreat that has knocked a tenth off prices since last week.
US light crude for May delivery recouped some early losses to stand 60 cents lower at $US100.26 a barrel in early trade on Tuesday. London Brent crude fell $US1.01 to $US98.85 a barrel.
Analysts said a slowdown in the US economy, combined with a seasonal fall in demand in the second quarter, might drive oil prices below the $US100 mark for the coming weeks.
US crude oil stocks likely rose for a third week, climbing 700,000 barrels in the week to March 21, while distillate and gasoline stocks probably fell, according to a preliminary Reuters poll ahead of Wednesday's government data.
Oil has dropped more than $US10 from last week's record as investors fled commodities on a view that gains had been overdone, giving a lift to the beleaguered dollar in the process.
The US currency extended its recovery from a 13 year low against the yen on Monday and held gains on Tuesday.
A recovery in the US dollar from recent lows against the euro was pressuring the nominal price of virtually all dollar denominated commodities, including crude.
Uncertainty over world energy demand growth has kept OPEC from raising production to curb high oil prices, despite calls from consumer nations for additional output.
Traders said Monday's losses were tempered somewhat by stronger than expected US homes sales data that lifted Wall Street stocks, and forecasts of unusually cold weather in the US Northeast and European heating markets