Oil prices fell below $64 a barrel on Tuesday in Asia extending a 13 percent drop over the last week on investor doubts about a global economic recovery.
Benchmark crude for August delivery fell 43 cents to $63.58 a barrel by afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Monday, it fell $2.68 to settle at $64.05.
Prices reached an eight-month high last week above $73, but quickly tapered off as dismal unemployment figures suggested that the U.S. and Europe would be slower to rebound out of recession than expected.
Some analysts expect prices to rally again soon on signs that the worst of the economic slowdown is over.
"I think the market will look for some positive news and head back up toward $70," said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney. "There's been some profit taking in the last week, but I don't think there was a real change in sentiment."
More attacks on Nigeria's oil infrastructure helped boost prices. Nigeria's main militant group said Monday it seized a chemical tanker with six foreign crew members aboard and attacked a second oil facility.
Investors will be looking to a weekly inventory report from the Energy Department's Energy Information Administration on Wednesday for signs that crude demand may be growing.
Analysts expect the EIA's crude inventory numbers to fall 3.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
In other Nymex trading, gasoline for August delivery fell 0.63 cent to $1.73 a gallon and heating oil dropped 0.59 cent to $1.62. Natural gas for August delivery slid 2.0 cents to $3.47 per 1,000 cubic feet.
In London, Brent prices fell 47 cents to $63.58 a barrel on the ICE Futures exchange.