Oil slipped towards $77 a barrel Tuesday as markets awaited data expected to show that the pace of U.S. economic recovery is slower than previously estimated.
By early afternoon in Europe, benchmark crude for December delivery was down 12 cents to $77.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 9 cents to settle at $77.56 on Monday.
The U.S. government was due to report Tuesday on gross domestic product and consumer confidence. Investors expected the data to show the economy is still growing, but at a slower pace than initially calculated.
Also, many analysts predict the economy will weaken again next year as the effect of stimulus packages wears off and the jobless rate dampens consumer spending.
Crude has bounced between $76 a barrel and $82 for more than a month as a weakening dollar offsets concerns about tepid consumer demand. Oil often trades inversely to the strength of the dollar as investors buy commodities as a hedge against inflation.
"The ceiling has been set by weak refining margins, lackluster demand and a global economic recovery that is expected to be sluggish," Societe Generale said in a report.
Investor optimism was buoyed by a report Monday from the National Association of Realtors that October home sales rose more than 10 percent, suggesting strength in the U.S. economy. On the other hand, crude refiner Valero Energy said it shut down a plant last week because demand for oil products such as gasoline has been weak.
In other Nymex trading, heating oil was up 0.81 cent to $1.9880 a gallon. Gasoline for December delivery rose 0.84 cent to $1.9878 a gallon. Natural gas for December delivery was 0.4 cents higher at $4.477 per 1,000 cubic feet.
In London, Brent crude for January delivery rose 23 cents to $77.69 on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.