Oil prices slipped toward $68 a barrel on Monday, pressured by a stronger U.S. dollar and weakness on Wall Street.
U.S. crude fell 35 cents to settle at $68.09 a barrel, off a seven-month high of $70.32 hit on Friday. London Brent fell 46 cents to $67.88.
The slim losses came as the greenback strengthened against a basket of other currencies. A stronger dollar tends to weaken commodities markets by reducing the purchasing power of non-U.S. buyers.
Wall Street, meanwhile, dipped into negative territory after fast-food giant McDonald’s warned that second-quarter profits could be hurt by currency swings. .N
Oil’s losses were tempered by expectations data from the U.S. Energy Information Administration due Wednesday would show a 400,000-barrel decline in crude stockpiles in the world’s largest energy consumer.
Brimming oil inventories in the United States have been shrinking slowly in recent weeks as OPEC production cuts dig into import levels.
OPEC members have promised to cut 4.2 million barrels a day of oil from their production levels since September and so far analysts say they have met 75 percent to 80 percent of that pledge.
OPEC kingpin Saudi Arabia has said oil at $75-$80 a barrel is fair and would encourage future investment.
Also trimming oil’s losses Monday, JP Morgan (JPM.N) raised its forecast for fourth-quarter 2009 U.S. oil prices, this time to $65 a barrel, versus above $55 in their latest monthly energy report in May.
“If economic forecasts are right, and we are coming out of the recession, the path for oil is going to be somewhat higher,” said Lawrence Eagles, Global Head of Commodities for JP Morgan Chase.