Source AP ©

Crude oil prices continue to decline from record levels

Crude oil prices continued to decline in Asia on Tuesday on concerns about the U.S. economy and as investors sold to lock in profits from last week's record-setting rally.

Light, sweet crude oil for September delivery fell 23 cents to US$71.83 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning. It was almost US$7 a barrel lower than the intraday record of US$78.77 hit last week.

The contract fell US$3.42 to settle at US$72.06 a barrel on Monday in the U.S.

Gasoline futures continued to slide as well in the U.S., dropping more than 10 cents to settle below US$2 a gallon.

The price declines began Friday after the government issued weaker-than-expected employment numbers. That data added to the sentiment from a series of other government reports that analysts say suggest the economy might be slowing.

Some analysts expect a repeat of last year, when oil prices dropped nearly US$20 between early August and early October. Others disagree, noting that global demand remains strong.

Valero Energy Corp.'s report Monday of a weekend fire at a Port Arthur, Texas, refinery did little to stop the slide.

Refinery news and outages were a main driver of prices in the spring and early summer, but in recent weeks, refineries have boosted capacity and output, alleviating those concerns. Gasoline futures and retail prices have been falling for weeks.

Contributing to the market's bearish tone were the latest export numbers from the Organization of Petroleum Exporting Countries, which showed its exports rose in July for the fifth consecutive month.

U.S. gasoline and distillate stockpiles are expected to have increased again last week, according to a Dow Jones Newswires survey of energy analysts ahead of the weekly inventory report due Wednesday from the Energy Information Administration.

Gasoline stocks are expected on average to have increased 1 million barrels, according to the survey, while distillate stocks, which include heating oil and diesel fuel, are expected to have gained 1.8 million barrels.

Refinery utilization is expected to have grown for the seventh straight week to 93.7 percent of capacity from 93.6 percent. Crude oil stocks are expected to have fallen by 2 million barrels.

September Brent crude fell 3 cents to US$71.14 a barrel on the ICE futures exchange in London.

Nymex gasoline futures rose 0.41 cent in electronic trade to US$1.93 a gallon (3.8 liters) while heating oil prices rose 0.57 cent to US$1.945 a gallon.

Natural gas prices rose 3.2 cents to US$6.24 per 1,000 cubic feet.