Oil prices slip

Futures decline as stocks turn negative and investors anticipate another dour inventory report.

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By Ben Rooney, CNNMoney.com staff writer

Click the chart for current oil prices.
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NEW YORK (CNNMoney.com) -- Oil prices fell Tuesday as investors weighed concern about weak demand and flush supplies against signs that the economy may be stabilizing.

Light, sweet crude for June delivery fell 63 cents to settle at $53.84 a barrel. The retreat comes after oil surged to $54.47 a barrel Monday - its highest level of the year.

The price of oil has been mostly rising with the major stock indexes in recent sessions. Many oil traders view the stock market as a leading economic indicator and a barometer of future energy demand.

"Prices moved higher because equities moved higher," said analyst Stephen Schork in his energy trading newsletter The Schork Report.

Stocks turned negative in choppy, midmorning trade after a rally in the previous session sent the major indexes to multi-month highs.

The stock market has been boosted by stronger-than-expected readings on housing, manufacturing and consumer spending that suggest the worst of the economic decline has past.

Meanwhile, persistently weak demand for oil and record-high inventory levels continue to be a burden on the market.

The nation's stockpiles of crude are at their highest levels since 1990, while demand for oil is down nearly 11% to its lowest level since 1999.

Supply concerns were in focus ahead of the government's weekly inventory report, due Wednesday at 10:30 a.m. ET. Analysts surveyed by research firm Platts expect the report to show crude supplies grew by 2.2 million barrels last week.

Oil has traded in a range near $50 a barrel in recent weeks as investors remain wary of the market's poor fundamentals. That's down nearly $100 a barrel from last summer's all-time high. To top of page

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