Oil fell on Tuesday as a firmer dollar encouraged investors to take profits from a two-week rally ahead of weekly data that analysts have forecast will show a build in U.S. crude inventories.
"We got a little extended on the upside - we had a price advance of more than $6 a barrel in crude in less than two weeks," said Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates. "And now I think we have some money managers taking profits ahead of the API and EIA data."
Analysts polled by Reuters expect data to show U.S. crude inventories rose 2.7 million barrels last week. Industry group the American Petroleum Institute releases its weekly figures on Tuesday at 4:30 p.m. EST.