Oil fell in Asian trade Wednesday after overnight gains in commodities buoyed by gold's record breaking price surge, analysts said, as investors turned their focus on to a key US inventory report.
New York's main contract, light sweet crude for December delivery eased 17 cents to 79.43 dollars a barrel.
Brent North Sea crude for December delivery was 40 cents lower at 77.71 dollars.
Oil had earlier followed gold's lead as the precious metal soared to new record highs Tuesday above 1,080 dollars an ounce after the International Monetary Fund said it sold 200 tonnes of gold to India for 6.7 billion dollars.
However analysts said crude likely fell Wednesday because of a stronger US currency, which makes dollar-priced crude more expensive for holders of other foreign units.
"The US dollar has gotten a little stronger this morning and that may have something to do with crude edging down," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
In Asian trade, the euro traded at 1.4713 dollars compared with 1.4728 in late US trade Tuesday.
According to Shum, crude prices are unlikely to hold above the 80 dollars level due to investor concerns about energy demand amid mixed signals on the state of the global economy, in particular the US, the world's top oil user.
"When oil gets close to the 80-dollar level and the market tends to focus more on the high inventories of crude oil and fuel globally, it is difficult to surge through 80 dollars and sustain above the 80-dollar level," Shum said.
"The market will also look at the US government inventory report coming out later today," he said.
A Dow Jones Newswires poll of analysts expect US crude reserves to have risen 1.4 million barrels in the past week when the Department of Energy releases its widely monitored inventory report later Wednesday.
Gasoline (petroleum) stocks are seen falling 100,000 barrels while distillates, which include diesel and heating oil, are tipped to decline by one million barrels.
