Oil prices fell by more than 2% this evening, reversing an earlier rally, after data showed that US consumer confidence plunged to the lowest level in five months in July.
The data prompted US crude prices to back down sharply from a new 11-week high of $79.69 a barrel earlier to fall by $1.65 a barrel to $77.33. Brent fell $1.63 to $75.87.
Rising oil production capacity in the Gulf of Mexico after Tropical Storm Bonnie fizzled out over the weekend without damaging infrastructure also weighed on oil prices, analysts said.
Oil prices have been testing a potential run over $80 a barrel after trading in the $70 to $80 range since early June, analysts said.
Some technical analysts, who study price charts for clues to future direction, think oil prices could still break through $80 a barrel following a breach of the key 200-day moving average level last week.
