Crude oil futures prices were weaker Tuesday, trading below $97 a barrel as the dollar strengthened against the euro.
The selloff in gasoline futures, spurred by weak demand, continued to add downside pressure to crude prices.
Light, sweet crude oil for June delivery on the New York Mercantile Exchange was down 78 cents at $96.59 a barrel. Crude hasn't settled below $97 a barrel since Feb. 28. ICE July Brent crude was 23 cents down at $110.14 a barrel.
"We're seeing some dollar strength against the euro and the gasoline market, which has given up unprecedented amounts, is weighing heavy on this," said Peter Donovan, vice president at Vantage Trading.
Gasoline futures fell 4.7% on Monday, with prices settling below $3 a gallon for the first time since the end of March. Nationwide retail prices for regular gasoline have retreated from a threat of crossing the $4 a gallon level for the first time since summer 2008. AAA Daily Fuel Gauge Report said retail prices averaged $3.944 a gallon Tuesday, down 1.1 cents from Monday.
The Energy Information Administration last week cut its already slim expectations for growth in U.S. gasoline demand during the spring-summer driving season, to a 0.2% bump higher from the month-earlier expectation of a 0.4% rise. But the International Energy Agency, the policy watchdog for the major industrialized nations, warned U.S. peak season demand could drop 2% from a year ago under the weight of high prices.
High prices are impacting demand as refiners are expected to be increasing operations, which is loosening earlier worries over tightening stockpiles. U.S. oil inventory data due Wednesday from the EIA is expected to show crude oil inventories rose by 1.1 million barrels last week, according to a survey of analysts by Dow Jones Newswires. Gasoline stockpiles are seen rising by 400,000 barrels, while stocks of distillates (heating oil and diesel) are expected to rise by 400,000 barrels.
June delivery reformulated gasoline blendstock futures were down 1.03 cents at $2.9208 a gallon.
June heating oil futures were 1.39 cents lower at $2.8605 a gallon.