* BarCap lowers price forecast, first time in 16 months
* Oil fell 8.5 pct last week, biggest drop in eight weeks
* For technicals showing oil at $70, click: []
(Updates prices)
By Joe Brock
LONDON, July 5 (Reuters) - Oil edged above $72 a barrel on
Monday, rebounding from a three-week low, but gains were capped
by concerns over slowing global economies and demand for fuel.
U.S. crude for August <CLc1> climbed as much as 56 cents to
$72.70 a barrel on Monday and was up 14 cents at $72.28 by 1052
GMT.
The New York Mercantile Exchange (NYMEX) will combine
Monday's and Tuesday's trading sessions because of the U.S.
Independence Day holiday, with a single settlement price on July
6.
ICE Brent crude for August <LCOc1> rose 36 cents to $72.01.
"We seem to have found a bottom in the low $70s in what
should be a quiet day's trade," said Carsten Fritsch, oil
analyst at Frankfurt-based Commerzbank.
"Where oil moves next very much depends on equity market
sentiment and the economic outlook and as long as economic
pessimism persists oil should hold at the lower end of the
$70-$80 range."
Asia's stock markets were mixed, while European shares were
largely unchanged in a trading session where volumes were
expected to be thin on equity and oil markets because of the
U.S. holiday.
Oil prices fell every day last week for a cumulative decline
of 8.5 percent, the steepest weekly drop since early May.
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For a graphic on the performance across commodity markets
this year: http://link.reuters.com/hun72k
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Barclays Capital, a bank which has long predicted higher oil
prices, lowered its crude price forecasts for this year and next
due to persistent weak economic indicators, although its
forecasts remain well above current prices. []
U.S. crude touched $71.62 on Friday, the lowest intraday
level since June 8, after a report showing a
larger-than-expected drop in U.S. nonfarm payrolls for June of
125,000.
The dollar and U.S. equities also fell after the weak U.S.
jobs report rekindled doubts about the strength of recovery, yet
failed to confirm widespread fears the economy was dipping back
into recession. []
WEATHER
Gulf of Mexico oil operations continued to restart on Friday
after being shut as a precaution before Hurricane Alex hit
Mexico last week. []
A weather system between Jamaica and Honduras in the
Caribbean Sea had a 30 percent chance of developing over the
next two days into a tropical cyclone, a category that includes
tropical storms and hurricanes, the U.S. National Hurricane
Center said late on Sunday.
The system's location and expected course are similar to
those that Hurricane Alex followed during its formation stage in
late June, before moving into the Gulf of Mexico, forcing
Mexican oil terminals to shut down and U.S. producers to curb
output.
Money managers cut net long crude oil positions on the New
York Mercantile Exchange in the week through Tuesday, the
Commodity Futures Trading Commission said on Friday, reducing
bets that prices will rise. []
Open interest positions remained bulked at August crude oil
$70 and $65 put options on Friday, an indication that traders
are betting prices will fall towards those levels.
[]
(Editing by Keiron Henderson and Sue Thomas)
