Oil fell to a two-week low near $76 a barrel on Thursday, marking a third straight session of sharp losses, as fickle fuel demand continued to sour investor risk appetite.
Demand worries grew as data showed that people filing new claims for unemployment benefits in the United States unexpectedly rose in the latest week to its highest level in close to six months.
U.S. crude CLc1 for September delivery was down $1.27 at $76.75 a barrel at 11:20 a.m. EDT (1520 GMT). It earlier dropped as low as $76.05, the lowest for front-month crude since July 28, after the release of the jobs data.
Brent crude LCOc1 traded at $76.37, down $1.28.
The news on jobless insurance claims was a further reminder of that economic growth is slowing in the world's largest economy, said Tim Evans, analyst at Citi Futures Perspective in New York.
The petroleum markets remain under follow-though selling pressure from Wednesday's drop ... with a weaker S&P 500 and firmer U.S. dollar also part of the mix, Evans added.
The oil price slide comes a day after data showed a higher-than-expected rise last week in gasoline stockpiles, underlining demand weakness even as the U.S. summer driving season peaks. [EIA/S]
China, which rivals the U.S. as the world's biggest oil consumer, showed signs of an abrupt slowdown in economic growth this week.
U.S. equities dropped on the jobless claims data, following an earlier slide in Asian stock exchanges that reeled from the gloomy Chinese data.
The U.S. dollar rose against a basket of other major currencies .DXY, extending the previous day's strong gains amid risk aversion fueled by the jobs data.
Jittery investors turned to gold, the traditional safe-haven asset in troubled economic times. Gold was on track to post its biggest one-day rally in two months as the latest set of troubling economic data further eroded confidence in the global economy.
The International Energy Agency added to negative sentiment about future energy consumption, after the adviser to 28 industrialized countries said on Wednesday that oil demand growth next year would be sharply lower if the economy falters.
Weak economic data continues to paint a picture of a fragile global recovery after the Federal Reserve on Tuesday warned about the U.S. economy.
The U.S. trade gap widened 18.8 percent in June, suggesting its second quarter economic growth was weaker than previously thought.
The downbeat Fed view, plus the signs of a slowdown in Chinese economic growth combined on Wednesday to erase the years gains in U.S. equities. (Additional reporting by Gene Ramos and Robert Gibbons in New York, Joe Brock in London, Florence Tan in Singapore; Editing by Marguerita Choy)