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Oil falls below $84 a barrel in Asia after sharp rally ahead of key US economic releases
KUALA LUMPUR, Malaysia (AP) ' Oil prices fell below $84 a barrel Wednesday in Asia ahead of U.S. economic data this week that will provide clues about the future strength of demand for crude.
Benchmark oil was down 85 cents to $83.60 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract surged $4.21 to finish at $84.45 per barrel in New York on Tuesday.
In London, Brent crude for November delivery was down 79 cents at $106.35 on the ICE Futures exchange.
Oil's rally Tuesday mirrored gains in global stock markets, buoyed by hopes that Europe was preparing a plan to contain the region's debt crisis that would prevent another recession.
But some analysts foresee bleak prospects.
JP Morgan projected the economies of the 17 countries using the euro common currency will shrink by up to 1 percent in the next nine months before resuming growth in the second half of 2012. This could hurt oil demand, it said.
Energy investment consultants Ritterbusch and Associates said oil prices are likely to head south in the near term as a longer-term solution to Europe's debt crisis remained elusive.
It said the focus has shifted to key economic releases in the U.S. due later this week that will give clues on the future strength of demand for fuel, including gross domestic product, crude stockpiles and personal income.
The American Petroleum Institute late Tuesday said crude stocks rose 568,000 barrels for the week ended Sept. 23, lower than market expectations. However, Ritterbusch said it expected stockpiles data from the Energy Department's Energy Information Administration ' the market benchmark ' due later Wednesday to show weak demand.
Crude oil has fallen about 15 percent since July and is down 26 percent since hitting a high for the year of $113.93 per barrel on April 29.
In other energy trading, heating oil fell 1 cent to $2.87 per gallon, gasoline futures shed 2.2 cents to $2.61 per gallon and natural gas was down 3.1 cents at $3.80 per 1,000 cubic feet.