Oil retreated on Tuesday to stay below $75, tracking Asian equities lower and on forecasts for a seventh straight weekly gain in distillate fuel inventories at top consumer the United States.
Chinese stocks fell 2 percent on reports that Beijing will not relax tougher property measures any time soon, curbing early gains in other Asian equity markets and tempering strong U.S. corporate earnings and forecasts for a fourth consecutive weekly fall in the nation's crude stockpiles.
U.S. crude prices fell 19 cents to $74.76 a barrel by 12:49 a.m. ET after rising by as much as 43 cents to $75.38 a barrel earlier. ICE Brent declined 26 cents to $74.11.
Market participants watch stock markets and euro events more than fundamentals, said Keichi Sano, general manager of research at SCM Securities in Tokyo.
We shall expect more hurricanes this season, so at this point we should pay more attention to the level of stockpiles.
U.S. crude stockpiles probably fell by 2 million barrels in the week to July 9, a Reuters survey showed, after tumbling 5 million barrels a week earlier because of shutdowns and shipping disruptions related to Hurricane Alex.
U.S. distillate inventories probably rose by 700,000 barrels, the survey showed, while gasoline probably added 300,000 barrels.
The industry group American Petroleum Institute will release its weekly inventory report on Tuesday at 4:30 a.m. ET, followed by government statistics from the Energy Information Administration on Wednesday at 10:30 a.m. ET.
Crude on the New York Mercantile Exchange (NYMEX) touched $76.48 on Friday, the highest price this month, but still more than $10 below an early-May peak above $87.
Japan's Nikkei average earlier on Tuesday edged up 0.5 percent as investors took heart from Alcoa's (AA.N) stronger-than-expected quarterly profit reported after the close of U.S. trade, but later slid 0.4 percent.
Many investors were anticipating earnings forecasts to be revised downward, given expectations for slowing economic activity in the United States and China.
The U.S. results season officially started on Monday, with the focus now on quarterly reports from JPMorgan (JPM.N) on Thursday and General Electric (GE.N) on Friday.
BP said it had installed a cap meant to halt the flow of oil from its ruptured Gulf of Mexico well on Monday and the Obama administration issued a new moratorium on deepwater oil drilling.
BP's oil leakage trouble does not necessarily give a bullish impact to the back of the (forward price) curve, Sano said. If deepwater developments are prohibited, then other forms of non-conventional gas and crude oil production can compensate.
(Editing by Clarence Fernandez)