•Crude futures fell in early European trading Tuesday, on the back of bearish technicals and renewed dollar strength, sources said. "There are good sellers on Brent today. The strong dollar is adding to negative sentiment," a trader said.

•"We expect energy prices to continue to drift lower, with the pace increasing somewhat now that tropical storm [Fay] worries are over and the dollar seems to have resumed its climb after stalling for much of the day [Monday]," MF Global said in a report.

•The ICE Dollar Index reached fresh near-eight-month highs at 77.413 ahead of key US housing and inflation data later today. The euro slumped to six-month lows against the dollar at $1.4631 before recovering to $1.4671 following a better-than-expected recovery in German economic sentiment.

•The prospect of seasonal refinery maintenance in the US and Asia also weighed on short term sentiment, sources said. "In the very near term crude demand will be lower in September relative to August and mediocre margins are not providing much support to counter the recent downtrend," an analyst said. broker said.

Updated: August 19, 2008