Oil prices dipped below $73 in Asian trade on Friday as concerns over weak US economic data pervaded crude markets, analysts said. New York's main contract, light sweet crude for October delivery, fell 37 cents to $72.99 per barrel.
Brent North Sea crude for delivery in October shed 33 cents to $74.69. Crude prices reversed gains made late on Thursday as weak data from the US Federal Reserve of Kansas City released on Thursday showing manufacturing activity slowing in the region weighed down markets, analysts said.
"The Federal Reserve of Kansas City said manufacturing in their region has slowed," said Ben Westmore, minerals and energy economist for the National Australia Bank in Melbourne.
The bank stated in its monthly report that "the net percentage of firms reporting month-over-month increases in production in August was zero, down from 14 in July." "Tenth District manufacturing activity slowed in August, and producers were somewhat less optimistic than in previous months," the report added.
This, coupled with "pretty weak" US crude stockpile data released by the US Department of Energy (DoE) Thursday, overpowered a sharper-than-expected drop in jobless benefit claims for the past week, he stated.
The US DoE said crude inventories soared 4.1 million barrels last week, much more than the 200,000 drop analysts had expected, while gasoline stockpiles rose 2.3 million barrels, against forecasts for a 500,000-barrel decline.
Labor Department data showed Thursday a drop in jobless benefit claims to 473,000 for the week to August 21 from the previous week's 504,000, better than most economists' expectations of 485,000.