Oil price back below $72 in Asia amid weak demand

Oil prices fell below $72 a barrel Monday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world's largest economy.

Benchmark crude for October delivery was down 40 cents at $71.64 a barrel by midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.

The recession has sapped American fuel consumption, and US oil stockpiles are 14 percent larger than last year even as recent data suggests the economy is clawing out of recession. The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.

"Most of the macro data from the US over the last month has been supportive of oil prices," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "But inventories remain high and demand is weak, so that's capping prices."

Moore said crude will likely average $64 a barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.

In London, Brent crude fell 41 cents to $70.91 on the ICE Futures exchange.