Oil drops to near $76 amid new economic jitters

[June 25, 2010]  LONDON (AP) -- Oil prices fell to near $76 a barrel Friday in Europe as stock markets tumbled amid concerns over the pace of the global economic recovery.

Benchmark crude for August delivery was down 45 cents to $76.06 a barrel by late morning in London in electronic trading on the New York Mercantile Exchange. The contract added 16 cents to settle at $76.51 on Thursday.

Oil was lower after lackluster data Thursday from the U.S. that renewed concerns over a slower-than-expected global economic recovery that may hurt crude demand, said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.

"Oil is trading sideways and may continue to do so next week amid the economic uncertainties," Chu said.

U.S. unemployment benefit claims failed to show hiring was increasing last week, durable good orders slipped last month and orders of big-ticket goods were down in May. The reports come a day after the Federal Reserve issued a statement on the economy that showed the central bank is also more cautious about a recovery.

The Energy Information Administration said Wednesday that crude oil supplies increased by 2 million barrels last week, while analysts were expecting stockpiles to drop. Traders got more discouraging news when the government said new home sales dropped by a third to a record low last month.

In other Nymex trading in July contracts, heating oil was down 1.38 cents at $2.0434 a gallon, gasoline fell 1.33 cents to $2.0802 a gallon and natural gas was up 0.6 cents at $4.754 per 1,000 cubic feet.

Brent crude was down 64 cents at $75.83 a barrel on the ICE futures exchange.

[Associated Press; By CARLO PIOVANO]

Associated Press writer Eileen Ng in Kuala Lumpur contributed to this report.

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