Oil price update - Aug 6

Oil fell below $75 a barrel on Monday, extending the previous session's decline as concern about the US economy rippled through financial and commodity markets.Those worries were heightened after US stocks fell on Friday, following a report showing weaker than expected job growth last month and another on slowing service sector growth."The weaker macro numbers are raising the prospect of softening US commodity demand in general, and energy demand in particular," MF Global said in a report.

"Making matters worse is the parallel crisis we are seeing in the sub-prime markets, where the ripples have now broken outside the confines of this niche area."US crude fell $1.11 to $74.37 by 0904 GMT. London Brent was down 85 cents at $73.90."The sell off was continued from Friday and largely due to the decline in the US financial markets. Some investors may have taken risk adjustments and are selling out of liquid commodities assets to cover commitments in other markets," said Gerard Burg at the National Bank of Australia."Apart from the US factor, there are no major fundamental stories dragging down prices."European shares opened more than 1% lower before recovering slightly. Emerging market shares dropped around 1.8% and Japanese equities slipped 0.4%.US crude has eased since touching a record high of $78.77 last week. The reluctance of the Organization of the Petroleum Exporting Countries to increase crude output has limited losses.Global economic growth and political turbulence are the reasons for rising oil prices, a Kuwait oil ministry official said in remarks published on Sunday.OPEC meets on September 11 to set production policy, and some officials have said the exporter group does not need to increase supplies. Source