Oil settled down 3.65 percent to $57.26 a barrel on Tuesday, with U.S. crude extending losses for a fifth straight day, as the dollar rallied amid evidence that the United States and top oil exporter Saudi Arabia were pumping more than the world needed.
North Sea Brent and U.S. crude were down more than $2 a barrel each as the dollar hit two-week highs against a basket of currencies, making crude and other dollar-denominated commodities less affordable for holders of money such as the euro.
The selloff in oil also came ahead of Tuesday's end-of-business expiry in U.S. crude's front-month contract, which often results in heavier than usual market activity. Volume in U.S. crude's July contract, the new front-month from Wednesday, was markedly higher than the expiring June , Reuters data showed.
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Brent futures were down $2.12, or 3.2 percent, at $64.16 a barrel by 2:35 p.m.
The tumble in crude occurred despite an industry report scheduled later in the day that was expected to cite a third straight weekly decline in U.S. crude stockpiles.
The American Petroleum Institute report is due at 4:30 p.m. EDT (2030 GMT), before official inventory numbers on Wednesday from the U.S. government's Energy Information Administration.