The price of oil retreated to near $98 a barrel on Tuesday, after shedding more than $1 a day earlier, in thin trading conditions.
By early afternoon in Europe, benchmark U.S. crude for February delivery was down 82 cents to $98.47 in electronic trading on the New York Mercantile Exchange. On Monday, the contract declined $1.03 after closing above $100 on Friday for the first time since Oct. 18.
Despite Tuesday's decline, the Nymex contract is on pace to rise around 8 percent for the whole of 2013.
Analysts said that performance was partly due to a boom in shale oil in the U.S., which offset concerns over supply outages in other countries.
Recently, a stronger dollar has been keeping a cap on oil prices by making commodities like oil priced in dollars more expensive for traders using other currencies. On Tuesday, the euro was down to $1.3778 from $1.3793 late Monday in New York.
Later in the day, investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Dec. 27 is expected to show a draw of 1.5 million barrels in crude oil stocks and a build of 2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday. The report from the Energy Department's Energy Information Administration — the market benchmark — will be out Friday, two days later than usual because of the New Year's holiday.
Crude stocks have fallen for four straight weeks but still remain 9.2 percent over five-year averages.
Brent crude, a benchmark for international oils, was down 27 cents to $110.94 on the ICE Futures exchange in London. On Monday, the Brent contract lost 97 cents.
In other energy futures trading on Nymex:
— Wholesale gasoline lost 1.11 cents to $2.7758 per gallon.
— Heating oil added 0.3 cent to $3.0591 per gallon.
— Natural gas fell 7 cents to $4.357 per 1,000 cubic feet.