Oil eases from 7-week high above $73
Oil edged below $73 a barrel on Tuesday, after rising for three straight sessions to settle at a seven-week high the previous day, buoyed by a weak dollar and optimism over the pace of global economic recovery.
With earnings from a number of major U.S. firms this week, the market is likely to take trading cues from Wall Street, which some investors expect to continue a winning streak.
A monthly report by producer group OPEC, due later in the day, could also offer clues on the outlook for global oil demand.
U.S. crude for November delivery fell 36 cents to $72.91 by 0210 GMT (10:10 p.m. EDT), after settling 2.1 percent higher at $73.27 on Monday. London Brent crude lost 21 cents to $71.15.
We're revising our forecast range for oil up to $70 to $80 for the remainder of the year, from $65 to $75. Sentiment is moderately positive, and while fundamentals do not necessarily justify higher prices, the trend of a weaker dollar has been a big boost, said Sumisho Sano, General Manager of Research at SCM Securities in Tokyo.
Cold temperatures in the U.S. have also been very price supportive.
The National Weather Service said total U.S. heating demand will be higher than normal this week as the first seasonal wave of cold weather hits the Northeast and Midwest.
Further support came from a fall in the U.S. dollar as investors positioned ahead of U.S. corporate earnings later this week on expectations that strong results will drive risk tolerance higher.
Some of the biggest U.S. corporate names are scheduled to report results this week, a reality check for whether the seven-month rally in stocks this year has further to run.
The S&P 500 managed a sixth consecutive day of gains on Monday to end at its closing high for the year, but the Dow and Nasdaq ended little changed as investors opted to lock in profits before the earnings season began in earnest. <.N>
Traders have been looking for signs of an economic turnaround that could support fuel demand, which has been hard hit by the recession.
U.S. weekly oil inventory data from the American Petroleum Institute (API) will be delayed until Wednesday due to the Columbus Day holiday, while the Energy Information Administration (EIA) report will be released on Thursday.
A Reuters poll of analysts forecast the data will show a 700,000-barrel build in crude stocks last week, after a surprise drawdown last week. Distillate stocks were seen falling by 100,000 barrels while gasoline inventories were forecast to have risen by 700,000 barrels.
(Editing by Michael Urquhart)
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