LONDON — Brent crude futures fell to around $57 a barrel on Tuesday as the dollar hit multi-year highs and the oil market remained hobbled by oversupply and weak demand.

The US dollar touched a near 12-year peak against the euro and an eight-year high against the yen, hurting commodities priced in dollars by making them more expensive for holders of other currencies.

At 2.29pm GMT, Brent was down $1.52 at $57.01 a barrel, having touched an intraday low of $56.81 after US traders arrived at their desks. US crude was down 47 cents at $49.53 a barrel.

Traders and analysts said there was a risk of further falls as speculative net long positions were so high, particularly in Brent, while the fundamental picture remained one of weakness with no sign of any slowdown in production.

"In order to balance the market we need the supply glut to be brought down, by rising demand or lower supply," Ole Hansen, senior commodity strategist at Saxo Bank, said.

Demand from China, the world’s second-largest oil consumer, slowed in February as the Lunar New Year holiday cut into shipping volumes.

At the same time, global refinery maintenance is about to peak, with global offline capacity assessed at 5.7-million barrels per day in April, according to Energy Aspects.

"Brent is looking increasingly heavy with a decline likely to lowest levels in almost four weeks expected within the next couple of sessions," oil analysts at Jefferies Futures said in a note.

Carsten Fritsch, an oil analyst at Commerzbank, said Brent had tried and failed to regain the $60 level on Monday, which had triggered a round of selling from short-term investors.

"Brent could see further declines now, given the large overhang of speculative long positions," he said.

US crude has held up a little better because of a report from market data firm Genscape showing only a modest stock build last week at the Cushing, Oklahoma delivery point.

Investors are waiting for weekly US inventory reports from industry group the American Petroleum Institute and the US government’s Energy Information Administration to see whether the Genscape numbers are confirmed.

According to a Reuters survey, US crude stocks are set to extend their record build for a ninth week.

Reuters