Oil Slips Below $72 as Economic Worries Weigh on Market
Oil prices slipped as worries about global economic health outweighed concerns that U.S. refinery problems could hit supplies in the world's top consumer.
U.S. crude fell to a range of $71.60 after trading down to $71.20 a barrel earlier. London Brent dropped 44 cents to $70.51 a barrel.
U.S. consumer confidence fell to its lowest level in a year in August on concerns about a softening labor market and turmoil stemming from the subprime mortgage crisis.
"The stocks market and global market environment are still under pressure and that is impacting the oil prices," said Olivier Jakob with Petromatrix.
OPEC Secretary-General Abdullah al-Badri said the subprime fallout had clouded the oil demand picture.
"The situation in the past couple of weeks has become a lot more serious," Badri told Reuters in an interview.
Badri said on Monday that he felt the international oil market was well supplied, suggesting OPEC would keep supplies at their current levels when the group next meets on Sept. 11.
Some analysts have said supplies could be stretched to keep up with demand later this unless OPEC raises output.
Oil prices have fallen 9.5 percent since reaching a record peak of $78.77 on Aug. 1 as speculators liquidated positions and some traders worried about the wider economic implications of the credit market squeeze.
Earlier in the day, oil prices rose due to U.S. refinery snags and expected drops in gasoline stocks. Traders said Citgo had cut rates at its 156,000-barrel-per-day refinery in Corpus Christi, Texas, after a problem with the alkylation unit.
The market is also awaiting fresh news on Chevron's refinery at Pascagoula, one of the 10 biggest in the United States, after a fire shut one of its crude units.
U.S. oil inventory data, to be released on Wednesday, may show a 1.5 million barrel draw in gasoline stocks and an 800,000 barrel draw in crude inventories in the week to Aug. 24, according to a Reuters poll of analysts.