Oil price falls below $67 a barrel

PRICE FALL: Oil fell below $67 a barrel with uncertainty over the state of the global economy. (AFP)

Oil fell below $67 a barrel on Tuesday as uncertainty over the state of the global economy hit equity markets and increased expectation that oil demand could be slow to revive significantly.

The market awaited US weekly inventory data from the American Petroleum Institute due later on Tuesday and US government oil stocks figures on Wednesday for clues on the demand outlook for the world's top energy consumer.

US crude for August was down 59 cents at $66.91, by 0905 GMT. US crude for July delivery expired on Monday, settling down $2.62 at $66.93 a barrel.

London Brent crude fell 55 cents to $66.43.

A Reuters poll of analysts ahead of the government inventory data forecast crude stocks fell by 1.3 million barrels last week on lower imports, while gasoline stocks and distillates, including heating oil and diesel fuel, were seen rising.

The API will release its weekly stockpile data at 2030 GMT, while the US Energy Information Administration will release its report on Wednesday at 1430 GMT.

"The stock markets and global economic outlook pushed oil through key support levels but they now seem to be finding support at around $67 on WTI (US crude) and $66 on front month Brent," said Christopher Bellew, a broker at Bache Commodities.

A renewed focus on economic weakness saw US stock markets suffer their worst one-day loss in two months, adding pressure to oil prices. The S&P 500 fell back into negative territory for the year on Monday, as investors reconsidered the health of the economy.

Following Wall Street's fall, Japan's Nikkei average closed down almost 3 percent on Tuesday.

Equity losses came after the World Bank said prospects for the global economy remained "unusually uncertain" as it cut 2009 growth forecasts for most economies, adding to concerns of a slower turnaround.

Investors were also cautious ahead of a two-day U.S. Federal Reserve policy meeting on interest rates.

The Organization of the Petroleum Exporting Countries wants an oil price of $75 a barrel by the end of the year, according to the group's president.

US oil hit a high above $73 a barrel this month but has not been at $75 since October 2008.

"It's the goal to achieve this price," Jose Botelho de Vasconcelos, who is also Angolan oil minister, told reporters on his arrival in Vienna on Monday ahead of talks on Tuesday between the European Union and OPEC.

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