Oil prices trading around $78 Tuesday, lower US dollar

Oil prices fell on Tuesday, but are trading close to most of its previous session gains of 3 percent, hovering above $78 a barrel, as traders took profit ahead of the release of key US indicators and a weekly fuel inventories report.

US crude oil futures for December delivery fell 30 cents to $78.60 a barrel by 0405 GMT Tuesday on the NYMEX, while in London Brent crude oil fell 30 cents to $78.46 on the ICE Futures Exchange.

Oil prices rallied on Monday as a weaker US dollar encouraged hedging activities, while better than expected US consumer spending data also buoyed hopes of energy demand recovery in the world’s largest oil consumer.

But with a lengthy calendar of economic data due on Tuesday, analysts said traders were expected to take a cautious stance and would hesitate to drive oil prices higher despite Asian equities hitting a 15-month high.

“The guidance is really going to come from the US dollar and the bunch of US economic data due later tonight,” said David Moore, a commodities analyst at the Commonwealth Bank of Australia.

Tags:  oil prices, US dollar