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Oil Extends Losses As Dollar Steadies

Oil prices extended losses on Tuesday as the dollar rose with Treasuries on inflation worries and concerns about Fed tapering. Optimism about strong demand recovery helped capped the downside to some extent.

Benchmark Brent crude futures dipped 0.6 percent to $71.10 per barrel, after having declined 0.6 percent on Monday as data showed China's crude imports were down 14.6 percent in May on a yearly basis. U.S. crude futures were down 0.6 percent at $68.84.

The dollar strengthened as investors looked ahead to the release of key U.S. inflation data due on Thursday for clues on when the Federal Reserve may begin to talk about tapering its asset purchases.

A stronger greenback makes crude more expensive for buyers with other currencies.

Traders also seemed to be weighing the prospects of Iranian oil coming into the market. Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports.

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