Oil price dips on economic worries .

OIL fell for the sixth straight session today, as the market failed to sustain a rally in light of worries about slowing economic growth.

Light, sweet crude for August delivery settled down US16 cents, or 0.2 per cent, at $US71.98 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down US2c at $US71.45 a barrel.
The drop continued the longest stretch of declines since mid-May as traders dismissed an optimistic economic forecast made by Australia's central bank after the Institute for Supply Management reported that the US nonmanufacturing sector grew more slowly in June than expected.
Commodity and equity prices had factored in a more robust recovery, but less-than-stellar economic data have resulted in steep declines since late June in many markets.
Oil prices have fallen 8.7 per cent since June 25, while the Dow Jones Industrial Average is down more than 4 per cent over the same period.
"We're just heavy. We failed to sustain the upside. We did not achieve an escape velocity," said Tim Evans, an energy analyst with Citi Futures Perspective.
Concerns have surfaced about a period of slow growth or potentially a double-dip recession now that the economic boost of government stimulus spending is waning amid fears of further adding to deficits. Meantime, disappointing US employment data and other indicators cast doubt on whether the private sector will spend enough to sustain a recovery.
"After all the negative economic statistics we had last week, there's a bigger question: How much of the price we've got right now was predicated on an economic recovery that doesn't really look like it's going to materialise?" said Peter Beutel, president of the trading advisory firm Cameron Hanover.
Mr Beutel said slower-than-expected economic growth this year could knock prices back to between $US55 and $US65 a barrel.
A sluggish world economy would also take longer to use up surplus inventories that built up during the downturn in 2008 and 2009. The Department of Energy's Energy Information Administration will offer the next indicator of oil supply and demand later this week.
US crude stocks are expected to fall by 1.8 million barrels, according to the mean of six analysts' forecasts in a survey by Dow Jones Newswires. All but one analyst predicts a decline. Petrol inventories are expected to drop by 100,000 barrels, while distillate stocks, including heating oil and diesel, are seen rising 1.7 million barrels.
"The direct fundamentals for the oil market are not supporting prices," Mr Evans said. "We still have a surplus of inventory."