SIOUX FALLS, S.D. (AP) — Oil prices slipped Tuesday as traders cashed out profits from seven straight sessions of price jumps built on hopes of an economic recovery and a falling dollar.
Benchmark crude for July delivery fell 46 cents to $68.12 a barrel on the New York Mercantile Exchange. The contract on Monday jumped $2.27 to settle at $68.58, the highest close since early November.
Optimism that the economy could soon turn the corner has been boosting prices of late, as oil and related products got a lift from positive industrial production growth in China and a smaller than expected contraction in U.S. manufacturing, said trader and analyst Stephen Schork.
Commodities have also gained support from the dollar getting pounded on fears of continued runaway spending by the U.S. government, said Phil Flynn, an analyst at Alaron Trading Corp.
Investors are prone to buy commodities like oil and gold as a protection against inflation and dollar weakness.
Flynn said the past seven sessions of price jumps have come because all the news has been bullish.
"What kind of news? Well any kind of news because we seem to be living in a world where good economic news for oil is bullish and bad economic news might be bullish too," Flynn wrote in his daily report.
Wednesday's release of petroleum inventory data from the Energy Department's Energy Information Administration could provide some insight about crude demand. Analysts expect a fall of 2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Stocks dropped last week for a third straight week after rising for the previous 10 weeks.
In other Nymex trading, gasoline for June delivery fell nearly a penny to $1.9157 a gallon and heating oil rose less than a penny to $1.7784 a gallon. Natural gas for June delivery slid 8.5 cents to $4.164 per 1,000 cubic feet.
In London, Brent prices were down 75 cents to $67.22 a barrel on the ICE Futures exchange.
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Associated Press Writers Alex Kennedy in Singapore and George Jahn in Vienna contributed to this report.
