Oil extends decline below $67 on gloomy econ data

                                
 * Oil falls 1 pct below $67, bearish sentiment returns
                                
 * Gulf of Mexico oil operations normal, companies eye storm
                                
 * U.S. consumer sentiment at lowest since March
                                
 By Fayen Wong
                                
 PERTH, Aug 17 (Reuters) - Oil prices fell below $67 a
barrel on Monday, extending the previous session's 4.3 percent
decline, as poor U.S. economic data clouded the outlook for a
quick global recovery and prompted further profit taking.
                                
 Oil on Friday fell by $3.01, or 4.27 percent -- the biggest
loss since July 29 -- after the Reuters/University of Michigan
Survey of Consumers showed consumer confidence in early August
dropped to the lowest level since March. [ID:nN14294408]
                                
 U.S. crude oil futures <CLc1> fell 61 cents to $66.90 a
barrel by 0140 GMT, while London Brent crude <LCOc1> fell 46
cents to $70.98.
                                
 "Oil prices are still suffering from the hangover of last
week's poor U.S. consumer sentiment and high crude inventory
data. A fall in equities markets today would further weigh on
oil," said Ben Westmore, a commodities analyst at the National
Bank of Australia.
                                
 Weighed down by the weak U.S. consumer confidence data, the
U.S. dollar index <.DXY> inched higher by 0.14 percent on
Monday, while most Asian stocks fell, with Japan's Nikkei
average <.N225> down 2 percent and South Korea's Kospi <.KS11>
opening 0.17 percent lower.
                                
 "Oil remains highly correlated with equity markets at 0.86,
but the correlation with the U.S. dollar has fallen somewhat to
0.66," Mark Pervan, a commodities analyst at the Australia &
New Zealand Bank, said in a research note.
                                
 Key housing data and producer prices due to be released on
Aug. 18 will offer further clues on the health of the U.S.
economy, analysts said, although U.S. stocks could extend last
week's retreat after four weeks of gains as the earnings season
winds down. [ID:nN16321499]
                                
 Oil' steep decline on Friday brought it to a weekly loss of
4.8 percent, snapping a four-week streak of gains that were
largely fuelled by optimism that the global economy had turned
a corner and recovery later this year would boost energy
demand.
                                
 Although the hurricane season has arrived in the Atlantic,
analysts say swelling crude stockpiles that are at their
multi-year highs would limit the impact of a storm on oil
prices.
                                
 U.S Gulf of Mexico offshore oil patch output was unaffected
by Tropical Storm Claudette, which was quickly passing far to
the east of main production areas, oil companies said on
Sunday. [ID:nN16311392]
                                
 The hurricane season has taken on a particularly ominous
feel in the Gulf Coast region because two of the past four
years have brought intense and destructive storms that
disrupted operations at offshore platforms and coastal
refineries, but many forecasts are for a mild hurricane season
this year.
                                
 Separately, Iran's OPEC governor Mohammad Ali Khatabi said
on Friday crude output increase is not on OPEC's agenda because
of high levels of oil storage by consumer countries.
[ID:nHAF424632]
                                
 Crude oil speculators on the New York Mercantile Exchange
decreased their net long positions in the week to Aug. 11,
according to data from the Commodity Futures Trading Commission
released on Friday. [ID:nN14566394]
 (Editing by Ben Tan)