Oil dips but stays above 74 dollars in Asian trade

Oil prices dipped but stayed above USD 74 in Asian trade today as demand uncertainty weighed on investors already wary from recent economic policies in the United States and China.

New York's main futures contract, light sweet crude for delivery in March, fell 18 cents to USD 74.53 a barrel.

In intraday trade Tuesday, the contract fell to USD 73.82, its lowest level since December 22. Brent North Sea crude for March shed 22 cents to USD 73.07.

The market remained weighed down by weakening demand after the American Petroleum Institute (API) reported on Tuesday a draw of 2.2 million barrels of its crude stocks.

Analysts said investors expect a clearer picture on oil demand to emerge when the US Department of Energy (DoE) releases its weekly report on energy inventories late today.

"The API number came out and it was a surprising draw. I think people are waiting and will be looking at the DoE numbers," said Clarence Chu, an oil trader with Hudson Capital Energy in Singapore.

Oil demand in the United States is closely monitored by the market because it is the world's leading consumer of energy.

There are also concerns that energy demand in China will take a hit after the government took measures to slow down its rapid economic growth amid fears of rising inflation.

China is the world's second biggest energy consumer.