NEW YORK, Aug 24 – New York\’s main contract, light sweet crude for October delivery, fell eight cents to 73.81 dollars a barrel.
Brent North Sea crude for October dropped 14 cents to 74.05 dollars around midday in London.
Despite dipping Monday sentiment "remains broadly supportive of commodities including oil in anticipation of an economic recovery", said David Moore, a commodity strategist with the Commonwealth Bank of Australia.
New York crude prices had scaled new 2009 highs last week, rising above 74 dollars Friday on a weak dollar, an improved US macro-economic outlook and positive eurozone data, traders said.
The New York contract soared to 74.72 dollars during US trading Friday, a level last seen on October 20 2008, before easing to close at 73.89 dollars.
"Reaching a new high for the year… might have also been a consequence of the increasing attractiveness of the crude oil as a valued asset that could provide a hedge against an inflationary environment further down the road," said analysts at ODL Markets trading group.
"The oil market (is) still digesting the unexpected big drop in inventories," they added in a note to clients.
The US Department of Energy last Wednesday said American inventories of crude fell by a massive 8.4 million barrels in the week ending August 14.
That snapped a three-week run of gains and took traders completely by surprise, with the market having expected an increase of 1.5 million barrels.
A slew of economic data released last week meanwhile suggested the US economy and eurozone economies were likely recovering, boosting hopes that energy demand in turn would see an uptick, analysts said.
"Data is sparse this week but should all support the view that recession is over," analysts from Singapore\’s DBS Bank said in a report in its view on the US economy.
Last week, the National Association of Realtors reported that US existing-home sales surged 7.2 percent in July to a seasonally adjusted annual rate of 5.24 million units, lifting hopes the world\’s biggest economy was heading for a recovery.
A slumping US dollar against the euro had also fuelled support for crude oil last week, analysts said.
A weaker dollar tends to stimulate demand for dollar-priced crude oil, which becomes cheaper for buyers using stronger currencies. In turn, that pushes prices higher.