NEW YORK (MarketWatch) -- Oil futures fell on Tuesday after a surge in the previous session, with the dollar rebounding slightly ahead of data on U.S. industrial production and housing that might provide clues about the economic recovery and energy demand. Crude remained lower after the U.S. government reported producer prices rose 0.3% in October, less than forecast. Excluding food and energy, prices unexpectedly dropped by the most in three years. Crude oil for December delivery fell 16 cents, or 0.2%, at $78.74 a barrel in electronic trade on Globex. "Crude-oil prices are down slightly, as a slight strengthening in the dollar is forcing a modest retracement," wrote Edward Meir, analyst at MF Global, in a note to clients. "We suspect that the $1.50 level [vs. the euro] will eventually give way, ensuring that commodities will push higher still," he said. The dollar rebounded on Tuesday after the previous session's sharp drop, supported by waning risk appetite. The euro (CUR_EURUSD 1.49, -0.01, -0.54%) fell 0.4% to $1.4885. The dollar index (DXY 75.30, +0.47, +0.63%) , which tracks the performance of the greenback against a basket of other major currencies, traded at 75.276 in recent trading, up from 74.908 late Monday. Crude futures rose more than 3% Monday, boosted by upbeat global economic reports and the drop in the dollar. The greenback fell to its lowest level since August 2008 on Monday. Oil is denominated in dollars, so a weaker dollar makes the commodity less expensive for investors holding other currencies. Energy traders are also awaiting inventories data from the American Petroleum Institute at 4:30 p.m. Eastern on Tuesday. Analysts polled by Platts expect a 1.2-million-barrel build in U.S. commercial crude inventories for the week ended Nov. 13. They also project an increase of 950,000 barrels in gasoline inventories and a decline of 700,000 barrels in distillate supplies. The Energy Information Administration will report its more closely watched data at 10:30 a.m. on Wednesday.

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