Oil falls below $81 amid weak US crude demand

[March 15, 2010]  SINGAPORE (AP) -- Oil prices fell below $81 a barrel Monday in Asia amid investor concerns flagging U.S. crude demand doesn't justify the recent rally.

Benchmark crude for April delivery was down 35 cents to $80.90 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 60 cents to settle at $82.09 on Friday.

Oil prices jumped from $69 early last month on expectations an improving U.S. economy would bring crude demand up with it. But oil consumption has lagged, and prices have stalled in the low $80s for the last week.

"U.S. demand for oil is falling," energy consultant Stephen Schork said in a report. "Until we see a decrease in unemployment and an increase in consumer confidence we will remain on guard for a double dip recession."

Investors will be eyeing this week's Federal Reserve meeting for signs of when policymakers may start raising record-low interest rates.

In other Nymex trading in April contracts, heating oil was up 0.3 cent at $2.097 a gallon, and gasoline dropped 0.2 cent to $2.253 a gallon. Natural gas declined 3.2 cents to $4.37 per 1,000 cubic feet.

In London, Brent crude was down 33 cents at $79.06 on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

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