Oil settles below $67
Crude futures bounce back a bit, but still extend Friday's sharp losses as investors remain jittery about the pace of recovery.
NEW YORK (Reuters) -- Oil fell below $67 a barrel Monday as investors became more cautious about the pace of global economic recovery and a potential revival in energy demand.
Global stocks fell broadly, pressured by persistent concern for the global economy, with data from Japan, the third largest oil consumer, showing that economic recovery may be shaky.
Crude oil futures for September fell 76 cents to settle at $66.75 a barrel after earlier hitting $65.23, the lowest since July 31.
The decline added to the market's $3.01, or 4.3% slide on Friday -- the biggest loss since July 29 -- after the Reuters/University of Michigan Survey of Consumers showed confidence in early August dropped.
"Crude futures are down, following the stock markets. It looks like the economic optimism that we saw last week was overplayed as we saw a big bank fail and the market turned nervous on consumer confidence data," said Phil Flynn, analyst at PFGBest Research in Chicago.
The dollar rose against a basket of currencies as investors sought a safe haven away from commodities.
U.S. stocks opened lower, despite a gauge of manufacturing in New York state moved into positive territory in August, suggesting growth in the sector for the first time since April 2008.
Economy and weather. Japan's economy emerged from its longest recession in at least 60 years in the second quarter, but analysts said it would be a long road to a sustained recovery in the world's third-largest oil consumer.
Although the Atlantic hurricane season, which can disrupt Gulf of Mexico oil and gas production, has arrived, analysts said brimming crude stockpiles in the United States would limit the impact of a storm on oil prices.
Hurricane Bill, the first of this season, is expected to strengthen to a major category 3 hurricane by Wednesday, possibly reaching the area of Bermuda early on Saturday, the U.S. National Hurricane Center said.