Oil steadied over $71 a barrel on Tuesday as expectations for a crude inventory rise in top consumer the United States damped investor optimism.
U.S. crude slipped 3 cents to $71.55 a barrel by
11:17 a.m. EDT (1517 GMT), after rising nearly 13 percent in the previous three sessions. London Brent crude rose 40 cents to $73.95 a barrel.
Pressure came on forecasts weekly U.S. data would show a build in crude stockpiles. A Reuters forecast of analysts predicted U.S. crude inventories rose 1 million barrels in the week to July 31, while distillate stocks were seen rising by 1.6 million barrels.
The gains of the past few days deteriorated as expectations for a further build to stockpiles grew and prompted some profit-taking, Mike Fitzpatrick, vice president at MF Global in New York, wrote in a morning research note.
Optimism a potential turnaround in the global economic could lift sagging oil demand has helped send crude up from lows below $33 a barrel in December, with energy traders keeping an eye on equities markets for signs of rebound.
U.S. stocks <.N> were mixed in early trade while the U.S. dollar
Markets found some support from news pending sales of previously owned U.S. homes rose at a faster-than-expected pace in June, advancing for the fifth month in a row for the first time in six years.
Energy traders were also keeping any eye on an area of thunderstorms in the Atlantic several hundred miles southwest of the Cape Verde Islands associated with a tropical wave, though the U.S. National Hurricane Center said it had less than a 30 percent chance becoming a tropical storm.
Storm activity in the U.S. Gulf of Mexico is closely monitored by traders for signs of potential disruptions to supplies of crude and natural gas offshore installations.
Colorado State University on Tuesday lowered its forecast for tropical storms and hurricanes in the Atlantic for 2009.
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos in New York; Christopher Johnson in London)