The Morning Oil Report

Seems that oil watchers are paying more attention to currency trades than anything else these days.

Benchmark crude for July delivery fell $1.42 to settle at $70.62 Monday on the New York Mercantile Exchange thanks to a surging dollar. But oil prices rose close to $72 on Tuesday as the dollar lost some steam and investors sought refuge in the commodity once again. Crude oil rose $1.23 to $71.85.

The dollar got a boost over the weekend after Russian Finance Minister Alexei Kudrin gave confidence to dollar backers. He said the dollar's role as the main currency reserve wasn't likely to change, despite Russian and Chinese officials' repeated comments for an alternative.

But Tuesday, Russian President Dmitry Medvedev muddied the Russian position and weakened the dollar's strength in calling again for new reserve currencies.

Most of the big U.S. oil stocks were beaten down by the closing bell Monday.

Exxon Mobil(XOM Quote) fell 97 cents to $72.81 on the day. Occidental Petroleum(OXY Quote) and XTO Energy(XTO Quote) slipped 2.7% and 3%, respectively. And Anadarko Petroleum(APC Quote) lost $1.22 to finish the day $49.35.

On Wednesday, oil prices and stocks will get a jolt after the U.S. Energy Department releases its most recent oil inventory data.