NEW YORK, United States – Oil prices dropped yesterday following disappointing reports on US consumer confidence and manufacturing.

The Conference Board’s Consumer Confidence Index for July fell from June levels and was lower than economists expected. The Richmond Federal Reserve’s regional report on manufacturing showed a slowdown as well.

Benchmark crude lost US$1.48 to settle at US$77.50 a barrel on the New York Mercantile Exchange.

Stocks pulled back from a three-day rally, wavering between gains and losses. The Dow Jones Industrial Average was about 20 points higher in afternoon trading. The Nasdaq and the S&P 500 were slightly lower.

“In the absence of any clear sign that the economy is going to recover or have a double dip, oil prices have taken almost daily cues from stock markets,” said US energy consultancy Cameron Hanover. “These have mostly followed economic indicators, but they have also followed individual earnings reports as insights into major companies, sectors or industries.”

The Energy Department’s Energy Information Administration issues its weekly report on petroleum inventories on Wednesday. Crude oil stocks are forecast to fall by 2.3 million barrels, while gasoline supplies are expected to grow by 1.1 million barrels, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.