Oil prices rose slightly on Monday as dealers expected U.S. inventory data this week to show a decline in stockpiles, but gains were limited by a stronger dollar and weaker equities.
U.S. light crude for July delivery rose 8 cents to $68.52 a barrel by 2:00 pm EDT, off the seven-month high of $70.32 hit on Friday. London Brent fell 3 cents to $68.31 a barrel.
The small gains came as analysts projected that data from the U.S. Energy Information Administration due Wednesday would show a decline in crude stockpiles in the world's largest energy consumer of 400,000 barrels.
Swolen oil inventories in the United States have been shrinking slowly in recent weeks as OPEC production cuts dig into import levels, analysts have said.
But oil's gains Monday were limited as the U.S. dollar strengthened. A stronger dollar tends to weaken commodities markets by reducing the purchasing power of buyers holding other currencies.
Wall Street, meanwhile, was headed lower after fast-food giant McDonald's warned that second-quarter profits could be hurt by currency swings. <.N>
OPEC EYES $75
OPEC kingpin Saudi Arabia has said oil at $75-$80 a barrel is fair and would encourage future investment.
Cartel members have promised to cut 4.2 million barrels a day of oil from their production levels since September and so far analysts say they have met 75-80 percent of that pledge.
Venezuelan Oil Minister Rafael Ramirez said on Sunday OPEC members were complying with 86 percent of promised cuts. A Reuters survey published last Wednesday said compliance had slipped to 75 percent from 81 percent in March and April.
If economic forecasts are right, and we are coming out of the recession, the path for oil is going to be somewhat higher, said Lawrence Eagles, Global Head of Commodities for JP Morgan Chase.