NEW YORK, United States – Oil prices reversed course and fell yesterday, as a morning stock market rally fizzled after an economic report predicted slowing growth in the US economy.

Benchmark crude for August delivery fell 16 cents to settle at US$71.98 a barrel on the New York Mercantile Exchange after rising as high as US$73.86 earlier in the day.

The Institute for Supply Management, a trade group of purchasing executives, said its index of services companies fell to 53.8 last month from 55.4 in May. Economists polled by Thomson Reuters forecast 55.0 for June. A reading above 50 indicates growth.

The report missed expectations but still signaled that the US economy is growing, albeit at a slower pace.

The Dow Jones Industrial Average rose 57.14 points to close at 9,743.62, after rising almost 200 points earlier in the session.

Some analysts are slashing oil price projections despite stronger crude demand in emerging economies. Barclays cut its forecast for the average oil price in the fourth quarter to US$87 a barrel from a previous estimate of US$92 and lowered its prediction for 2011 to US$92 from US$97.