By Claire Rangel Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Crude oil futures extended earlier losses Tuesday on disappointing consumer-confidence data from the U.S. that dented economic confidence. Oil prices were already trading below $80 a barrel, as traders took profits after recent massive gains. The focus has also switched away from the French refiners strike to the upcoming U.S. oil inventory data this week, with oil demand still lackluster. Light, sweet crude for April delivery recently traded $1.98, or 2.4%, lower at $78.33 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.91, or 2.4%, lower at $76.70 a barrel. U.S. consumer confidence dropped more than 10 points in February, raising concerns about the outlook for consumer spending. Consumer spending is a leading driver of gasoline consumption. The Conference Board said Tuesday its index of consumer confidence fell to 46.0, from a revised 56.5 in January and far below economist expectations of 54.8. Economic optimism had earlier appeared deflated with concerns arising again over the sovereign debt in Europe, which has been weighing on equity markets and seeing some exiting of investors from riskier assets. "Softer equity markets and a firmer U.S. dollar are encouraging the selling," noted Tim Evans, analyst with Citi Futures Perspective in New York. Oil sometimes falls on a stronger dollar as this makes the price of the commodity more expensive to other currency holders. "We are seeing a little bit of profit-taking as we've been up nine out of 10 sessions on not an awful lot of fresh news," said Peter Beutel, president of trading advisory firm Cameron Hanover in New Canaan, Conn. "There's a feeling prices have gotten too far ahead of themselves." While oil prices have rallied about $10 a barrel since the start of February, some analysts were unconvinced of the strength of oil's push above $80 a barrel given that there is still a hefty level of oil stocks globally amid continued tepid demand from developed countries, especially the U.S. Beutel noted "demand has not improved and supplies are still quite generous for this time of year." All eyes will be on this week's oil inventory data Wednesday to give guidance on gasoline supply levels in the U.S. after worries over the French refinery strikes contributed to gasoline and crude prices rising to their highest level in nearly six weeks Monday. Union workers at Total's (TOT) refineries in France have been on strike since last Tuesday over plans by the company to cut processing rates and to halt refining activities at the Flanders facility near Dunkirk. Analysts surveyed by Dow Jones expect gasoline stocks to have risen 500,000 barrels last week and crude stocks by 2 million barrels in a report to be released Wednesday by the U.S. Energy Information Administration. Distillate inventories, including diesel and heating oil, are expected to fall 1.6 million barrels while refinery processing rates are seen 0.1 percentage point higher at 79.9% of capacity. "People may start discounting the oil market ahead of the API (American Petroleum Institute) and EIA data," said Beutel. "As we get to the mid-week, we do take time to think of the supply and demand factors." The API data will be released late Tuesday. Economic data and cues from the financial markets could also direct the oil markets this week. U.S. Federal Reserve Chairman Ben Bernanke will deliver the semiannual testimony on monetary policy Wednesday and Thursday and market participants will watch for indications on any future interest-rate moves after the rise in last week's bank discount rate. Front-month March reformulated gasoline blendstock, or RBOB, recently traded 4.39 cents, or 2.1%, lower at $2.0719 a gallon. March heating oil recently traded 5.39 cents, or 2.5%, lower at $2.0249 a gallon. -By Claire Rangel, Dow Jones Newswires; 212-416-2846; claire.rangel@dowjones.com. (Kathleen Madigan in New York contributed to this article)

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