Oil prices fell below $74 today in Asia, taking a cue from weak stock markets and expectations the end of the summer driving season in the US will sap already weak demand.
Benchmark crude for October delivery was down 41 cents to $73.96 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange.
Nearly all regional stock markets were lower Tuesday, providing a negative lead for the oil market which has often looked to the performance of equities as a gauge of economic optimism and therefore crude demand.
Oil approached $75 a barrel yesterday for the first time in 10 months amid optimism that the world's economies are on the mend but fell back to settle at $74.37, up 48 cents on the day.
Expectations that demand for energy will grow, at least for oil and gasoline, were spurred by Federal Reserve Chairman Ben Bernanke, who said Friday the recession-hit US economy is reviving.
Bernanke's remarks and signs of improvement in the US housing market sent stock markets higher, and that carried over int o the new week.
Despite the optimism about recovery from recession, analysts say energy demand remains in the doldrums and seasonally lower demand for gasoline as the summer holidays end will exacerbate that weakness.
