Oil fell 15 cents on Tuesday afternoon, giving back early gains as the dollar strengthened and worries about the ailing world economy persisted.
U.S. crude settled 15 cents lower at $70.47, after rising as high as $72.77. London Brent crude settled unchanged at $70.24.
The dollar bounced up from session lows against the Euro and pushed oil down after early gains. A stronger dollar makes oil more expensive for holders of other currencies.
U.S. industrial production slid a steeper-than-expected 1.1 percent in May from the prior month, with output off sharply at factories utilities and mines.
“The market spent much of the day following the dollar around and some mixed economic data helped bring crude off the high,” said Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois.
The market is awaiting weekly U.S. inventory data, which is expected to show a 1.7-million barrel fall in crude oil stocks, based on an updated Reuters poll.
The American Petroleum Institute (API) will issue its report on Tuesday afternoon, with U.S. Energy Information Administration data due out on Wednesday.
Gasoline stocks fell 100,000 barrels last week, according to the poll, while distillate stocks likely added 800,000 barrels.
Expectations of an economic recovery drove crude prices to a near eight-month high above $73 a barrel last week, more than double their winter lows.
But some market experts are concerned oil and other commodities markets are overheating.
Economist Nouriel Roubini told the Reuters Investment Outlook Summit Tuesday that oil prices above $70 a barrel are not reflective of fundamentals.
World energy demand has shrunk since the onset of the financial crisis for the first time in a quarter century, bloating stockpiles in consumer nations.
Energy companies are also storing fuel on tankers, with some 62 million barrels estimated at sea, according to shipbrokers and traders.
Traders were keeping an eye on unrest in Iran, where the OPEC nation’s top legislative body ruled out annulling a disputed presidential poll but said it was prepared for a partial recount.
The 12-man Guardian Council said it was ready to re-tally some votes in the poll, in which hard-line President Mahmoud Ahmadinejad was declared the runaway winner, sparking the biggest street protests since the 1979 Islamic revolution.