Oil falls along with global markets

By Julianne Pepitone and Chavon Sutton, staff reporters

NEW YORK (CNNMoney.com) -- Oil prices dropped Monday in tandem with global stock markets, extending deep losses sustained late last week.

What prices are doing: Crude oil for July delivery fell 7 cents to settle at $71.44 a barrel. Crude prices are down more than 10% year-to-date, and have fallen 5.5% in the past month alone.

Click the chart to view other commodity prices.

Oil prices fell more than 4% Friday after a government report said almost all of the jobs added last month were temporary Census workers, and the euro fell to a 4-year low.

The national average price for a gallon of regular unleaded gasoline fell to $2.724, down from the previous day's price of $2.727, according to motorist group AAA.

What's moving the market: A disappointing jobs report on Friday fueled worries about when domestic demand will rebound, since America is the world's largest consumer of oil.

The report sent U.S. stocks tumbling Friday, with the Dow Jones industrial average (INDU) losing 324 points to end below the 10,000 mark. The S&P 500 and Nasdaq composite slid more than 3% each.

Overseas markets felt the pinch Monday, putting pressure on crude prices. Japan's Nikkei index tumbled to end nearly 4% lower and Hong Kong's Hang Seng index lost more than 2%. European markets also lost ground and U.S. stocks plunged further, with the Dow and the S&P both ending at 7-month lows.

Oil investors tend to look to stock markets as an indicator of future global fuel demand.

What analysts are saying: "Oil prices were depressed about the global economy today," said Phil Flynn, senior market analyst for PFG Best.

Oil prices had dipped as low as $69.51 a barrel in the trading session, as concerns about Europe and prospects for the U.S. economy weighed on traders. But the markets pared losses after a better than expected report on industrial production out of Germany hit the wires, Flynn said.

"Traders thought maybe the world's not coming to an end," he said.

Freefalling U.S. stocks gave little support to crude prices, leaving them in negative territory for the day. Flynn said that the disappointing jobs report and bad news out of Europe are keeping prices lower, but that crude buyers are not yet throwing in the towel.

"Psychologically, there's a lot of support for below $70 a barrel, but the market thinks its too early in the driving and hurricane season" to bring crude prices below that level, he said. To top of page

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