1st LD Writethru: Oil prices fall as U.S. dollar strengthens

Oil prices dropped Tuesday as a stronger U.S. dollar weighed on the crude market.

The U.S. dollar gained against other currencies Tuesday as upbeat economic data boosted rate hike forecast. A stronger greenback made the dollar-priced crude more expensive and less attractive for buyers holding other currencies.

The ample supply also dragged the crude market. In the week ending May 22, U.S. crude production retreated 112,000 barrels to 9.262 million barrels a day, according to Energy Information Administration (EIA)'s Wednesday weekly report.

U.S. crude supplies of that week decreased to 482.2 million, 90. 9 million barrels more than a year earlier. Inventories at Cushing, Oklahoma, the delivery point for the U.S. contract, lost 240,000 barrels to 60.44 million barrels.

Analysts are keeping an eye on the June 5 meeting of the Organization of Petroleum Exporting Countries (OPEC). There is no sign that the cartel will cut output quota during the meeting.

OPEC output increased by 18,000 barrels to average 30.84 million barrels per day in April, according to its monthly report.

Light, sweet crude for July delivery lost 1.69 U.S. dollars to settle at 58.03 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery moved down 1.8 dollars to close at 63.72 dollars a barrel. Endite