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Oil dips below 76 dollars a barrel

Oil prices dipped below 76 dollars in Asian trade Friday, extending losses on data showing weaker demand in the United States, the world's biggest energy-consuming nation.

business Updated: Jan 22, 2010 09:23 IST

Oil prices dipped below 76 dollars in Asian trade Friday, extending losses on data showing weaker demand in the United States, the world's biggest energy-consuming nation.

New York's main contract, light sweet crude for March delivery, tumbled 25 cents to 75.83 dollars a barrel. Brent North Sea crude for delivery in March shed 13 cents to 74.45 dollars.

"The DoE report was not very bullish. The refineries' capacities were down at around 78 percent and that was their lowest in the two decades," said Serene Lim, a Singapore-based oil analyst with the ANZ bank.

The US Department of Energy (DoE) said Thursday that gasoline reserves in the world's biggest economy increased by a stronger-than-expected 3.9 million barrels in the week ending January 15, striking a two-year high.

However, US crude stocks fell 400,000 barrels, according to the DoE report, confounding expectations of a large gain of 1.9 million barrels.

It said refineries operated at 78.4 percent of capacity last week, their lowest rate in at least two decades apart from the immediate aftermath of a hurricane.

Moves by China, the world's second biggest energy consumer, to slow down its roaring economy also weighed on traders' minds.

"I think people are very concerned about what the Chinese government would do next to curb the consumption demand growth," said Lim.

Crude futures sank almost 1.50 dollars on Wednesday on market concerns that a credit squeeze in China and swelling US stockpiles could dampen demand for the key commodity, traders said.

China's red-hot economy expanded 10.7 percent in the December quarter and by 8.7 percent for the whole of 2009.