UPDATE 6-Oil falls below $72 on global economy doubts

                                
 * BarCap lowers price forecast, first time in 16 months
                                
 * Stock markets volatile in low US holiday volume
                                
 * Oil fell 8.5 pct last week, biggest drop in eight weeks
                                
 
                                
 (Updates prices)
                                
 By Joe Brock
                                
 LONDON, July 5 (Reuters) - Oil fell below $72 a barrel on
Monday, heading for a sixth straight session of losses, on
lingering concerns over slowing global economies and demand for
fuel.
                                
 U.S. crude for August <CLc1> was down 62 cents at $71.52 a
barrel by 1625 GMT. It touched $71.34 intraday, the lowest level
since June 8. ICE Brent crude for August <LCOc1> eased 42 cents
to $71.23.
                                
 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.
                                
 "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," said Carsten Fritsch, oil analyst at
Frankfurt-based Commerzbank.
                                
 Asia's stock markets were mixed, while European shares and
Wall Street eased lower 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.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a graphic on the performance across commodity markets
                                
 this year: http://link.reuters.com/hun72k 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 Barclays Capital, 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. [ID:nSGE66403G] 
 
                                
 WEATHER
                                
 Gulf of Mexico oil operations continued to restart on Friday
after being shut as a precaution before Hurricane Alex hit
Mexico last week. [ID:nN01117871]
                                
 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.  [ID:nN02240600]
                                
 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.
[ID:nN02629491] 
 (Editing by Sue Thomas and Alison Birrane)