Oil prices slide amid weak Asian data

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Oil prices slid on Tuesday, mirroring a slump for equities, following a major downgrade to a key Chinese economic indicator and after the release of weak Japanese data, analysts said.

New York's main contract, light sweet crude for delivery in August, shed 1.49 dollars to 76.76 dollars a barrel.

Brent North Sea crude for August tumbled 1.44 dollars to 76.15 dollars per barrel in midday London trade.

"The main reasons (for the slump) were the sagging stock markets in Asia and an increasing risk aversion," said Commerzbank analyst Carsten Fritsch.

China's Conference Board economic index increased by only 0.3 percent in April instead of by 1.7 percent as originally estimated.

Other data suggested the outlook for Japan's economy is weak after unemployment rose unexpectedly in May, while factory output declined and household consumption fell. China and Japan are among the world's biggest consumers of energy.

Oil prices also fell on Tuesday as concerns eased over the possibility of a tropical storm in the Gulf of Mexico disrupting supplies.

"It looks like the storm missed the main oil-producing areas in the Gulf and as a result, some of the strength that's been a factor in moving prices is no longer there," said National Australia Bank analyst Ben Westmore.

With production on average of 1.7 million barrels of crude oil per day, the Gulf of Mexico accounts for more than 30 percent of oil output in the US, the world's biggest energy-consuming nation.

© 2010 AFP

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