Oil prices fell Monday in Asia, extending a decline prompted at the close of last week by news of a cooling U.S. job market.
Light, sweet crude for September delivery fell US$1.10 to US$74.38 a barrel in Asian electronic trading on the New York Mercantile Exchange, late afternoon in Singapore.
The contract declined US$1.38 to settle at US$75.48 a barrel Friday after the U.S. Labor Department reported the U.S. unemployment rate rose to 4.6 percent in July, a six-month high. That suggests the U.S. economy might be slowing, which could lower demand for oil and gasoline.
While crude futures set new price records above US$78 last week, they ended the week US$1.54 a barrel, or 2 percent, lower.
"Market participants are cashing in their profits and the concerns now are the weak U.S. economic data reported late last week," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The weak data gives market participants a reason to cash in their profits from the record highs established in the middle of last week," he said.
Also, Shum and other analysts said the recent price run-ups have been driven more by speculation than by fundamental issues and that it's to be expected that prices will fall from the highs as traders look at seasonal supply and demand balances.
Oil prices tend to peak in the summer, then slide in the fall. Last year, for instance, oil dropped nearly US$20 between early August and early October.
Fundamental factors that earlier supported prices in the U.S. spring and summer have eroded. In particular, demand for gasoline - typically high during the summer driving season - has ebbed. As well, U.S. gasoline inventories have been building the past several weeks.
Analysts say investment funds have been supporting prices in recent weeks by buying up contracts when prices hit technical triggers. Declines in crude oil inventories as refineries increase output have been cited as a fundamental reason for the price increases, but crude oil stocks in the U.S. are still higher than their average for this time of year.
September Brent crude fell 96 cents to US$73.79 a barrel on the ICE futures exchange in London.
Nymex gasoline dropped 2.09 cents to US$2.0081 a gallon (3.8 liters) while heating oil prices lost 1.95 cents to US$2.0145 a gallon.
Natural gas prices fell 16.8 cents to US$5.922 per 1,000 cubic feet.