Crude oil futures trading around $71 Tuesday open

Light crude oil futures are currently trading around the  $71 mark on Tuesday's open, paring some of the previous day's 3 percent gain, as worries about a rise in U.S. crude oil inventories offset optimism from positive US and Chinese manufacturing data.

The US dollar's fall to its lowest level this year helped boost U.S. crude oil futures on Monday, but with the dollar hovering near this level there was little new direction from the currency markets.

"The strong rally in oil prices over the past few days gave investors an opportunity to take some profits. There are also signs of increasing supplies," said Victor Shum, a Singapore-based analyst at Purvin and Gertz.

"And we should remember that we are going to enter a period of slow autumn demand. With supplies rising, it will not be surprising for oil to pull back below $70," he added.

U.S. light, sweet crude fell 69 cents at $70.89 a barrel by 2:19 a.m. EDT, after having fallen earlier by as much as $1.06. ICE Brent crude fell 37 cents to $72.18 a barrel.

Monday's gains brought oil prices, still less than half the record high of over $147 hit in July 2008, within sight of the year's high of $73.38 set in June.