Oil extends decline toward 77

Oil prices fell towards 77 a barrel,extending the previous session's decline of 2.6.

Oil prices fell towards 77 a barrel on Thursday,extending the previous session8217;s decline of 2.6 per cent,as fears of a protracted economic recovery in the United States drove investors to continue to take profit from oil8217;s recent rally.

Data this week from the United States has raised questions about a sustained recovery with consumer confidence dipping to recessionary levels and new home sales falling unexpectedly.

Concerns over the fragility of the health of the US economy and weakness in energy demand have prompted oil prices to fall about 6 per cent over five out of six trading sessions,since striking a one-year high of 82 on October 21.

US crude for December delivery fell 25 cents to 77.21 a barrel by 0213 GMT,after settling down 2.09 at 77.46 on Wednesday on government data that showed a surprise build in US gasoline inventories last week.

London Brent crude fell 22 cents to 75.64.

8220;US economic data again included some positives and negatives but,in the context of commodity markets that have been looking at the prospects for international economic recovery,it was the negatives that were the surprise and grabbed the attention of investors,8221; said David Moore,a commodities analyst at the Commonwealth Bank of Australia.

In a sign of investors8217; skittishness towards stocks and other riskier assets like commodities,the VIX indicator,Wall Street8217;s favourite barometer for market sentiment,jumped 12.4 per cent on Wednesday.

Analysts said traders were likely to remain wary ahead of the US gross domestic product GDP data due later on Thursday.

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The market is expecting the world8217;s largest economy to expand 3.3 per cent in the third quarter,but a lower growth figure could heighten concerns of a sluggish recovery and prompt a further sell-off in riskier commodities.

Asian shares tracked losses on Wall Street and fell on Thursday,with Japan8217;s Nikkei index falling to a 3-week low.

The U.S. dollar held firm near its highest in more than two weeks on Thursday,while the yen strengthened broadly as investors took profits on a host of growth-linked trades that had been in vogue in recent months.

Sales of new US homes unexpectedly tumbled in September,their first drop in six months,underscoring the hazards to an economic recovery even as businesses appeared to be stepping up investment.

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New single-family home sales fell 3.6 per cent to a 402,000 unit annual pace from a downwardly revised 417,000 units in August,the Commerce Department said on Wednesday.

The US Energy Information Administration data on Wednesday showed gasoline stockpiles logged an unexpected gain of 1.7 million barrels.