New York: Crude oil fell for a seventh day to trade near a one-month low in New York as Asian and European equity markets declined, fanning concern that the economic recovery may falter and impede fuel demand.

Oil reversed earlier gains as the MSCI World Index declined 0.6 per cent and the Europe Stoxx 600 Index dropped 1.4 per cent.

China's economic situation faces growing uncertainties and is becoming more complex, the head of the National Bureau of Statistics was quoted yesterday as saying in the bureau's newspaper. The country is the world's second-largest crude consumer.

"We see rather weak equity data, rather weak economic indicators," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "There's still this correlation. The most important thing is China. If growth fears in China increase, that's not good for commodities."

Oil for August delivery dropped as much as 54 cents, or 0.8 per cent, to $71.44 a barrel on the New York Mercantile Exchange.

It was at $71.66 at 9:53am London time. The contract fell Tuesday to $71.98, its lowest level since June 8, and has lost 9.1 per cent in seven days.

Brent crude for August was down 28 cents at $71.17 a barrel on London's ICE Futures Europe exchange.

The US Energy Department may say tomorrow that inventories of crude oil probably dropped last week as Hurricane Alex crossed the Gulf of Mexico, curbing domestic production and imports, a Bloomberg News survey showed.

Stockpiles fell 2.75 million barrels in the seven days ended July 2 from 363.1 million the week before, according to the median of eight analyst estimates. Seven of the respondents forecast a decrease and one estimated a gain.

Meanwhile, Middle East crude oils rose on expectations that demand will gain, after reports that Japanese refiners increased processing runs. Abu Dhabi's Murban for September loading gained 2 cents to a discount of 11 cents a barrel to its official selling price, according to data compiled by Bloomberg.

Lower Zakum climbed 4 cents to a discount of 15 cents, the data showed.

Japanese refiners operated at 67.5 per cent of capacity last week, up from 65.5 per cent the previous week, according to the country's petroleum association. Plants are returning to service after being shut for maintenance in July.

Oman crude for immediate loading dropped 95 cents, or 1.3 per cent, to $69.80 a barrel, according to Bloomberg data.

Dubai for loading in September decreased 94 cents, or 1.3 per cent, to $69.67. Abu Dhabi's Murban fell 1.3 per cent to $70.37.

Futures of Oman crude for September delivery on the Dubai Mercantile Exchange fell 4 cents to $69.48 a barrel, with 1,226 contracts traded. The settlement price was set at $69.21 at 12:30pm Dubai time.

The Brent-Dubai exchange for swaps for Aug-ust narrowed 15 cents to $1.22 a barrel and the exchange for swaps for September narrowed 12 cents to $1.05 a barrel, according to data from brokers PVM Oil Associates.

The exchange for swaps is the price difference between Brent and Dubai swaps contracts.