The economic news was a little better on Tuesday but not enough to keep oil prices from dropping again.

Benchmark crude for October delivery lost $2.13 at $72.57 a barrel in afternoon trading on the New York Mercantile Exchange.

The national average for a gallon of unleaded regular gasoline on Tuesday was $2.677 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's about half a cent less than a month ago and 6.7 cents higher than a year ago.

The Conference Board said its Consumer Confidence Index now stands at 53.5, up from 51.0 in July. Still, consumer confidence is far below the 90 reading that would indicate a healthy economy.

In addition, the Standard & Poor's/Case-Shiller 20-city home price index rose 1 percent in June from May and 4.2 percent from a year ago. However, home prices are expected to fall for the rest of the year.

Stocks got a little boost from the economic news. The Dow Jones Industrial Average was up about 15 points in early afternoon. The NASDAQ and the S&P 500 were little changed. Traders have kept an eye on stocks for signs about the direction of the economic recovery.

"Oil continues to spend much of its time trailing the stock market,"  analysts at Ritterbusch and Associates said in a report.

Many traders are awaiting August's unemployment data, due Friday, to get a better handle on the economy as well.

"Every bit of news will bump the market in one or the other direction,"  said Michael Lynch, president of Strategic Energy & Economic  Research in Winchester, Mass.

Energy prices also pulled back after Hurricane Earl turned toward the East Coast of the U.S. and away from oil and gas operations in the Gulf of Mexico. Big storms rolling through the Gulf can interrupt production and raise prices.

"Some of that premium is being taken out of the market," Lind-Waldock senior market analyst Rich Ilczyszyn said.

The Energy Department releases its weekly report on petroleum supplies on Wednesday. Analysts expect it to show that crude oil inventories continue to expand because of weak demand.

In other Nymex trading in September contracts, heating oil fell 3.27  cents to $1.9925 a gallon and gasoline slid by 4.71 cents to $1.8870 a gallon.  Natural gas for October delivery slipped 0.8 cent to $3.804 per 1,000 cubic feet.

In London, Brent crude was down $1.82 cents at $74.78 a barrel on the ICE Futures exchange.

Associated Press writers Pablo Gorondi and Alex Kennedy in Singapore contributed to this report.

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