Oil extends losses in Asia but holds above $76 amid concerns over US economic recovery

Oil extends losses in Asia on US growth concerns

KUALA LUMPUR, Malaysia — Oil prices extended losses but held above $76 a barrel Friday in Asia as weak U.S. economic data sparked renewed concerns that demand for crude may slow.

Benchmark crude for July delivery was down 48 cents to $76.31 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract dropped 88 cents to settle at $76.79 on Thursday.

Several economic reports Thursday provided fresh reminders that the U.S. economy isn’t bouncing back quickly. U.S. stocks fell after a surprise increase in new claims for jobless benefits and a weaker regional manufacturing report.

An unexpected rise in U.S. crude inventories last week after signs of improvement recently also weighed on the market although it is too early to say if demand has weakened.

“Oil pricing at $77 was overbought. It’s not surprising that prices have eased a bit given the bearish economic data,” said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.

Shum predicts oil prices will fall to around $75 a barrel before stabilizing.

Oil has jumped from $64 on May 25 — after dropping from $87 earlier last month — as fears eased that Europe’s debt crisis will stall global economic growth.

In other Nymex trading, heating oil shed 0.13 cent to $2.1461 a gallon, gasoline was flat at $2.1640 a gallon and natural gas shed 2.5 cents to $5.137 per 1,000 cubic feet.

Brent crude was down 38 cents at $78.28 on the ICE futures exchange.