LONDON -- Oil prices fell near $62 on Tuesday as milder weather and a recovering dollar in top consumer the United States offset prospects for a further OPEC cut.
U.S. crude slipped 34 cents at $62.10 a barrel at 1615 GMT, deepening a 99-cent loss the previous session. London's Brent crude fell 35 cents at $63.10.
"The cold snap in the U.S. is almost over and the forecasts are for a return to normal...plus the dollar has been quieter in the last two or three days. So put this all together and you have profit-taking on crude," said Frederic Lassere of SG CIB Commodities.
Oil prices were bolstered last week by a brief spell of cold weather in the U.S. Midwest.
But prices swiftly eased after U.S. National Weather Service forecast higher than usual temperatures next week in the U.S. Northeast, the world's biggest heating oil market.
Oil was also weighed down by a recovering dollar, which rebounded slightly from a 20-month low versus the euro.
"The market is keying off the dollar," said Phil Flynn, analyst at Alaron Trading.
A weak dollar has helped to drive buying across the commodities complex as dollar-denominated assets are relatively cheap.
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Some OPEC ministers have said the weakness of the dollar, which has shed seven percent this year, may erode oil producers' purchasing power, providing another argument for possible supply curbs.
"OPEC has signalled it will cut when it meets next week but I think the market is basically shrugging its shoulders," Andrew Harrington, a resource analyst at ANZ, said.
"The inventory level is still very high."
In absolute terms, crude oil stocks in the United States are at their highest level for the time of year since 1991.
Analysts polled by Reuters expected a U.S. government report on Wednesday to show a modest 400,000-barrel decline in distillate stocks, which include heating fuel, and a moderate increase in crude inventories. [EIA/S]
Most OPEC ministers have said they still see the need for a further output cut when they meet in Abuja next week and that, regardless of price, the market is oversupplied.
Six world powers were to meet in Paris on Tuesday to discuss a prolonged impasse on U.N. sanctions over Iran's nuclear programme, with the United States pushing Russia and China to quickly agree against Tehran.
A senior U.S. government official said he did not expect a breakthrough at the meeting.
Editor's note:
Warning: Oil Prices Will Collapse, Profit from It!
