Reports from Britain and Germany showed that international manufacturing remains weak. And U.S.-based economists noted that while America's jobless numbers improved last week, that doesn't necessarily mean consumer spending or energy consumption will return anytime soon.
"The residue of this recession will linger in the psyche of the American consumer — (whose) spending drives two-thirds of the U.S. economy — for quite some time to come," analyst Stephen Schork said in his energy market report.
Crude has fallen now for five days and the sell-off has been particularly strong for January contracts. More contracts are being sold in future months at higher rates, which indicates few people want to take ownership of oil right now.
Most energy experts believe the U.S. government will report Wednesday that crude supplies rose again last week, just as it has in seven of the past 10 weeks.
Benchmark crude for January delivery dropped $1.31 to settle at $72.62 a barrel on the New York Mercantile Exchange. In London, Brent crude for January delivery fell 91 cents to $75.52 on the ICE Futures exchange.
The Confederation of British Industry said one quarter of manufacturers expect output to fall over the next three months. Meanwhile, Germany said industrial output dropped 1.8 percent in October because of weak production of machinery and cars.
The dollar also rose, which can push oil prices lower. Because crude is priced in the U.S. currency, investors holding other currencies like the euro must spend more to buy oil.
In other Nymex trading in January contracts, heating oil fell 2.222 cents to $1.9875 a gallon while gasoline gave up 2.43 cents at $1.9163 a gallon. Natural gas rose 14.2 cents to $5.113 per 1,000 cubic feet.