Oil falls on weak US consumer confidence

       Oil prices fell below $66 a barrel yesterday in Asia on investor concerns that cr ude demand will remain weak amid a slow global economic recovery.
       Benchmark crude for September delivery was down $1.63 to $65.88 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Friday, the contract tumbled $3.01 to settle at $67.51.
       Friday's big selloff was triggered by a sharp drop in the Reuters/University of Michigan consumer sentiment index, a bad sign for crude demand,which has already been sluggish this summer.
       Oil also followed stocks down as Asian markets fell yesterday.
       "We've got overwhelmingly weak fundamentals in oil," said Victor Shum,an energy analyst with consultancy Purvin & Gertz in Singapore. 'The market has really been due for a correction."
       Investors brushed off evidence that the global slump may be nearing an end. Japan said yesterday that its econo-my grew an annualised 3.7% in the second quarter, breaking out of a yearlong recession.
       "The worst of the recession may be over, but for most economies, especially the US, the recovery may still be quite slow," Shum said.
       In other Nymex trading, gasoline for Se ptember delivery fell 0.70 cents to $1.93 a gallon and heating oil dropped 2.35 cents to $1.82. Natural gas for September delivery fell 4.8 cents to $3.19 per 1,000 cubic feet.
       In London, Brent prices dropped $1.97 to $70.44 a barrel on the ICE Futures exchange.
       Prices continued moving downwards as data released by the University of Michigan on Friday showed an unexpected fall in consumer sentiment,which spooked the commodities and equities markets, analysts said.
       "The report showed a drop in consumer confidence and that weighed on the oil market. The oil market was also pressured by the falling stock markets,"said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
       The report stated that its consumer sentiment index dipped to a preliminary 63.2 from 66.0 in August, confounding most analysts who had expected it to rise to 69.0 and raising further red flags on consumer spending, the main driver of the US economy.
       Shum added that weak oil fundamentals would continue to put a peg on crude prices.
       "Given the very weak oil market fundamentals, the mid-60s to high-60s is about the right range. The path of least resistance is down," he said.