Oil fell to around $74 on Thursday, with markets looking to key US data for the next clues on the state of the economy of the world's biggest oil user, where fuel inventories have swollen to record levels.

Front-month US crude for November fell 77 cents to $73.94 a barrel by 1146 GMT, while November ICE Brent fell $1.05 to $76.90.   

Economic data later in the day include US weekly jobless claims and existing home sales for August. Government data on Wednesday showed an unexpected increase in U.S. crude and gasoline stockpiles.   

The inventory increase last week, despite the eight day shutdown of the biggest pipeline shipping Canadian crude to the US, reaffirmed views that prices would mostly remain rangebound for the rest of the year between $70 and $80, the preferred level for Opec producers.

"(The data) is showing that the US continues to build. There is still a huge stock overhang in the US and the situation is not improving," Olivier Jakob of Petromatrix said.

The oil market has spent much of the year in lockstep with equities and negatively correlated to the US dollar. The dollar was up 0.32 percent against a basket of currencies.

"We are waiting for new data on the (US) economy to see what is going on, what the perspective for oil demand is," Barbara Lambrecht of Commerzbank in Frankfurt said.    

European shares fell, extending their decline for a third day, as fresh euro zone data added to existing worries about the strength of the global economic recovery.
 - Reuters