Oil falls to below $74 in Asia as investors eye strength of US economy, crude demand

Oil falls below $74 as traders look to US economy

SINGAPORE — Oil prices fell to near $74 a barrel Tuesday in Asia as investors mull the strength of the U.S. economy and demand for crude.

Benchmark oil for October delivery was down 83 cents at $73.77 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract last settled on Friday at $74.60, down 42 cents. Markets in the U.S. were closed Monday for the Labor Day holiday.

Analysts are still digesting Friday’s U.S. jobs report for August. Private employers added 67,000 jobs last month, more than analysts expected. However, the jobless rate rose in August to 9.6 percent from 9.5 percent in July.

“The latest release is better than expected but, we believe, still not very good,” energy consultancy and trader the Schork Group said in a report.

Oil has mostly traded in the mid-$70s this summer as investors struggle to gauge how much global economic growth may slow in the second half and how much that will affect crude demand. Most analysts expect the U.S. economy won’t slip back into recession.

“The bottomline is that there is no easy excuse for the slowdown in the recovery,” the Schork Group said. “On the other hand, we are far from a double dip recession. Growth in key industries will boost the economy slowly, but sustainably.”

In other Nymex trading in October contracts, heating oil fell 0.58 cent to $2.052 a gallon and gasoline dropped 1.22 cents to $1.907 a gallon. Natural gas for October delivery skidded 6.3 cents to $3.876 per 1,000 cubic feet.

In London, Brent crude was down 27 cents at $76.60 on the ICE Futures exchange.