Oil falls toward $100 on dollar

By Fayen Wong

SYDNEY (Reuters) - Oil fell for a fourth day on Tuesday, dipping briefly below the $100 mark as a stronger dollar, weaker demand and growing crude oil inventories extended a retreat that has knocked a tenth off prices since last week.

U.S. light crude for May delivery recouped some early losses to stand 60 cents lower at $100.26 a barrel by 3:46 a.m. (British time), a fourth day of losses and sharply down from a record high $111.80 a barrel touched on March 17.

London Brent crude fell $1.01 to $98.85 a barrel.

"There is a realisation in the market that the fundamentals really don't justify prices to be so far above $100. One of the key factors is the recent build-up in U.S. stockpiles and the stocks are looking pretty healthy at this stage," said Gerard Burg, a resource analyst at the National Australia Bank.

A lack of supply-side concerns, along with the recovery in the U.S. dollar, have also added downward pressure on oil prices, Burg said.

Analysts said a slowdown in the U.S. economy, combined with a seasonal fall in demand in the second quarter, may drive oil prices below the $100 mark for the coming weeks.

U.S. crude oil stocks likely rose for a third week, climbing 700,000 barrels in the week to March 21, while distillate and gasoline stocks probably fell, according to a preliminary Reuters poll ahead of Wednesday's government data.

Oil has dropped more than $10 from last week's record as investors fled commodities on a view that gains had been overdone, giving a lift to the beleaguered dollar in the process.