Oil falls below $72 in Asia on investor fears of slowing global economy

Oil falls below $72 amid fears of slowing economy

SINGAPORE — Oil prices fell below $72 a barrel Tuesday in Asia on investor concern global economic growth could slow in the second half and drag demand for crude down with it.

Benchmark crude for August delivery was down 35 cents to $71.79 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract last settled on Friday, losing 81 cents to $72.14.

U.S. markets were closed Monday for the Fourth of July holiday.

Investor fears of a double-dip recession in Europe and the U.S. later this year after last year’s contraction have weighed on stocks and commodities in recent weeks. A weaker than expected June jobs report on Friday added to concern the U.S. economic recovery could peter out once massive government spending stimulus ends.

“Nervousness about the broader …. economy and sustainability of demand keep oil prices under the thumb,” Barclays Capital said in a report.

Some analysts are slashing oil price projections despite strong crude demand from emerging economies. Barclays cut its forecast for the average oil price in the fourth quarter to $87 a barrel from the previous estimate of $92 and lowered its prediction for 2011 to $92 from $97.

In other Nymex trading in August contracts, heating oil fell 0.55 cent to $1.91 a gallon, gasoline dropped 1.79 cents to $1.9598 a gallon and natural gas jumped 10.3 cents to $4.790 per 1,000 cubic feet.

Brent crude was down 22 cents to $71.25 a barrel on the ICE futures exchange.