Oil prices steadied at above $77 a barrel on Thursday, pausing from the previous session's decline of 2.6 percent, as investors waited for more economic data to gauge the pace of economic recovery in the United States.
Data this week from the U.S. has raised questions about a sustained recovery, with consumer confidence dipping to recessionary levels and new home sales falling unexpectedly.
Concerns over the fragile health of the U.S. economy and weakness in energy demand have prompted oil prices to fall about 6 percent over five out of six trading sessions, since striking a one-year high of $82 on October 21.
U.S. crude for December delivery slipped 6 cents to $77.40 a barrel by 0805 GMT (4:05 a.m. EDT), after settling down $2.09 at $77.46 on Wednesday on government data that showed a surprise build in U.S. gasoline inventories last week.
London Brent crude edged up 5 cents to $75.91.
U.S. 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, said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
In a sign of investors' skittishness toward stocks and other riskier assets like commodities, the VIX indicator <.VIX>, Wall Street's favorite barometer for market sentiment, jumped 12.4 percent on Wednesday.
Analysts said traders were likely to remain wary ahead of the U.S. gross domestic product (GDP) data due later on Thursday.
The market is expecting the world's largest economy to expand 3.3 percent 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.
The financial crisis has forced the shutdown of factories across the globe and slashed global energy demand, prompting oil prices to fall from their peak of about $147 struck last July.
Oil demand in Japan, the world's third-largest energy consumer, looks to have declined by its widest amount in five months in September, Reuters projections based on industry data showed, as firm gasoline sales were not enough to offset weak industrial demand.
But on a brighter note, Japanese industrial output rose for the seventh month running in September, the longest streak of gains in more than 12 years, as global stimulus measures led car and electronics makers to increase production.
Asian shares fell on Thursday after a set of weak U.S. data rekindled worries about global growth and prompted a shift away from riskier assets, lifting the yen and underpinning the dollar.
Sales of new U.S. 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.
New single-family home sales fell 3.6 percent to a 402,000 unit annual pace from a downwardly revised 417,000 units in August, the Commerce Department said on Wednesday.
The U.S. Energy Information Administration data on Wednesday showed gasoline stockpiles logged an unexpected gain of 1.7 million barrels.
(Reporting by Fayen Wong; Editing by Clarence Fernandez)