Oil prices were near flat on Tuesday, supported by gains in equity markets but pressured by a strengthening U.S. dollar as investors remained concerned about the financial crisis in Turkey.
Brent crude futures rose 5 cents to $72.66 a barrel by 11:59 a.m. (1559 GMT) West Texas Intermediate (WTI) crude futures fell 2 cents to $67.18 a barrel.
Oil rebounded early from the previous session`s slide, then pared gains at mid-day as the U.S. dollar touched a 13-month high against a basket of currencies. A stronger dollar makes greenback-denominated oil more expensive for holders of other currencies.
"Usually when the dollar starts making highs, it`s probably a sign that we`re still concerned about the Turkish situation," said Phil Flynn, analyst at Price Futures Group in Chicago. "There`s still a bit of nervousness on the global stage."
U.S. stock indexes broadly gained and Turkey`s lira recovered about 5 percent, a day after crashing to an all-time low against the dollar, feeding worries that the country`s crisis might spread to other emerging markets..
"The equities and the U.S. dollar are keying primarily off of the unfolding saga in Turkey and although the lira has posted a significant rebound today, the standoff between Turkey and the U.S. is showing no sign of progress," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
"Consequently, worries over contagion are apt to increase in the process of reducing risk appetite and renewing downside pressures on oil pricing."
Oil drew support from concerns over lower global crude supply from top producers. The Organization of the Petroleum Exporting Countries said on Monday that Saudi Arabia had cut production. Export declines from Iran also are expected as Washington re-imposes sanctions.
But OPEC expects oil supply by countries outside the cartel to increase by 2.13 million bpd next year, 30,000 bpd more than forecast last month, boosted by new U.S. shale production.
Market participants awaited industry data on Tuesday from the American Petroleum Institute (API) that analysts expect will show U.S. crude and gasoline inventories fell last week. The data is to be released at 4:30 p.m. EDT (2030 GMT).
Global oil demand is rising, but not as fast as supply.
Analysts say trade disputes between the United States and China and turmoil in emerging markets could curb energy demand.
China`s economy is showing signs of cooling with investment in the first seven months of the year slowing and retail sales softening, data showed.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)