LONDON - Oil fell below $US72 a barrel, heading for a sixth straight session of losses, on lingering concerns over slowing global economies and demand for fuel.
US crude for August was down 36 cents at $US71.78 a barrel by 1422 GMT, falling away from an earlier intra-day high of $US72.70.
The New York Mercantile Exchange (NYMEX) will combine Monday's and Tuesday's trading sessions because of the US Independence Day holiday, with a single settlement price on July 6.
ICE Brent crude for August eased 15 cents to $US71.50.
"Where oil moves next very much depends on equity market sentiment and the economic outlook and as long as economic pessimism persists oil should hold at the lower end of the $US70-$US80 range," Commerzbank oil analyst Carsten Fritsch said.
Asia's stock markets were mixed, while European shares were largely unchanged in a trading session where volumes were expected to be thin on equity and oil markets because of the US holiday.
Oil prices fell every day last week for a cumulative decline of 8.5 per cent, the steepest weekly drop since early May.
Barclays Capital, which has long predicted higher oil prices, lowered its crude price forecasts for this year and next due to persistent weak economic indicators, although its forecasts remain well above current prices.
US crude touched $US71.62 on Friday, the lowest intraday level since June 8, after a report showing a larger-than-expected drop in US non-farm payrolls for June of 125,000.
The dollar and US equities also fell after the weak US jobs report rekindled doubts about the strength of recovery, yet failed to confirm widespread fears the economy was dipping back into recession.
Weather
Gulf of Mexico oil operations continued to restart on Friday after being shut as a precaution before Hurricane Alex hit Mexico last week.
A weather system between Jamaica and Honduras in the Caribbean Sea had a 30 per cent chance of developing over the next two days into a tropical cyclone, a category that includes tropical storms and hurricanes, the US National Hurricane Center said late on Sunday.
The system's location and expected course are similar to those that Hurricane Alex followed during its formation stage in late June, before moving into the Gulf of Mexico, forcing Mexican oil terminals to shut down and US producers to curb output.
Money managers cut net long crude oil positions on the New York Mercantile Exchange in the week through Tuesday, the Commodity Futures Trading Commission said on Friday, reducing bets that prices will rise.
Open interest positions remained bulked at August crude oil $US70 and $US65 put options on Friday, an indication that traders are betting prices will fall towards those levels.
