CHIECAOCHOANGDEN: Oil tumbles on economic jitters

Crude sharply lower as fears about U.S. economy shake world markets.

LONDON (Reuters) -- Oil fell below $75 a barrel Monday, extending the previous session's decline as concern about the United States economy rippled through financial and commodity markets.

Those worries were heightened after U.S. stocks fell Friday, following a report showing weaker than expected job growth last month and another on slowing service sector growth.

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Crude fell $1.43 to $74.05 a barrel in electronic trading.

"The weaker macro numbers are raising the prospect of softening U.S. commodity demand in general, and energy demand in particular," MF Global said in a report.

"Making matters worse is the parallel crisis we are seeing in the sub-prime markets, where the ripples have now broken outside the confines of this niche area."

London Brent was down $1.19 at $73.56.

"The sell off was continued from Friday and largely due to the decline in the U.S. financial markets. Some investors may have taken risk adjustments and are selling out of liquid commodities assets to cover commitments in other markets," said Gerard Burg at the National Bank of Australia.

"Apart from the U.S. factor, there are no major fundamental stories dragging down prices."

European shares opened more than 1 percent lower before recovering slightly. Emerging market shares dropped around 1.8 percent and Japanese equities slipped 0.4 percent.

Crude has eased since touching a record high of $78.77 last week. The reluctance of the Organization of the Petroleum Exporting Countries to increase crude output has limited losses.

Global economic growth and political turbulence are the reasons for rising oil prices, a Kuwait oil ministry official said in remarks published Sunday.

OPEC meets on Sept. 11 to set production policy, and some officials have said the exporter group does not need to increase supplies.

Oil prices affect the revenues of such companies as BP (Charts), Exxon Mobil (Charts, Fortune 500), ConocoPhillips (Charts, Fortune 500) and Chevron (Charts, Fortune 500).