Crude prices fell Tuesday on strong US dollar and a government report showed decline in US crude demand.

The dollar rose to a 5-month high against the euro in the morning. Commodities, which were used to hedge weak dollar, fell sharply as investors withdrew money from markets.

The Energy Information Administration (IEA) reported Tuesday that US oil demand during the first half of 2008 fell by an average 800,000 barrels per day compared to the same period a year ago. It's the biggest volume decline since 1982.

The EIA also lowered its forecast for global oil demand growth by 80,000 barrels per day in 2008.

Light, sweet crude for September settled down $1.44 at $113.01 a barrel, after falling to $112.31 earlier. London Brent crude fell $1.52 to settle at $111.15 a barrel.