NEW YORK?Oil prices plummeted Tuesday for the second consecutive day as investors fretted over the pace of the US economic recovery and growing oil inventories.

New York's main contract, light sweet crude for delivery in October, shed $2.78 to $71.92 a barrel in closing trade, while Brent North Sea crude for October lost 1.96 cents to $74.64.

"We are seeing increasingly poor fundamentals with the lower prices being acknowledged by market participants," said MF Global analyst Mike Fitzpatrick.

Citing "burgeoning inventories, the restricted demand and the poor economic climate," he said prices could drop below the $70 per barrel threshold by the end of the week.

The oil market's continued fall comes despite news of a surprise improvement in consumer confidence in the United States, which slightly boosted stock markets.

The Conference Board's consumer confidence index rose unexpectedly in August to 53.5 points, beating economist forecasts of 50 points but not doing enough to dispel fears the economy is slowing sharply after a long series of poor figures recently.

But minutes from the Federal Reserve's top committee released on Monday underscored concerns that the pace of the US economic recovery was slower than hoped for.

Although members of the Federal Open Market Committee expected the recovery to pick up pace in 2011, minutes from the August 10 meeting showed all but one member backed a return to some crisis-era measures to stimulate growth.

Sentiment had already been hit by a report on Monday from the US Commerce Department that showed personal incomes rose just 0.2 percent in July, less than the predicted gain of 0.3 percent.

Markets were awaiting other crucial data this week, including industrial manufacturing numbers on Wednesday and key employment figures on Friday, in the hope of getting a clear lead on the US economic outlook.