Oil prices fell further on Thursday but held near 76 dollars per barrel amid persistent concerns over demand in the United States, the world's biggest energy consumer, analysts said.
New York's main contract, light sweet crude for August delivery slid 35 cents to 76.00 dollars a barrel.
Brent North Sea crude for August delivery declined 31 cents to 75.96 dollars per barrel in afternoon deals.
"Investors remain cautious amid fairly volatile and nervous trading conditions, as the financial markets remain under pressure due to the global economic uncertainty," said Sucden analyst Myrto Sokou.
Wall Street also sank at the open on Thursday, hampered by losses across Europe, one day after the Federal Reserve raised concerns about the strength of the American economy's recovery from recession.
New York's Dow Jones Industrial Average fell 0.63 percent to 10,234.80 in initial trades.
Crude oil prices had already plunged on Wednesday on higher-than-expected US energy reserve estimates and signs of a limited economic recovery.
The Federal Reserve had indicated Wednesday, following a two-day monetary policy meeting, that the European debt crisis was taking a toll on recovery in the United States.
After leaving interest rates at record low levels, the Fed said economic conditions were likely to warrant keeping "exceptionally low" rates "for an extended period," repeating the language of previous statements.
"The pace of economic recovery is likely to be moderate for a time," said the panel headed by Fed chairman Ben Bernanke.
But it added that "financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad" -- an apparent reference to the eurozone sovereign crisis.
Markets were also jolted Wednesday after the US Department of Energy (DoE) showed a 2.0-million-barrel rise in crude stocks. Market-watchers had predicted a fall of 1.0 million barrel in the week to June 18.
"The oil market is softer ... because of the bearish US inventories we saw," said Serene Lim, a Singapore-based analyst with Australian bank ANZ.
"It means supply is outpacing demand... We are not really seeing any demand growth," she told AFP.
In addition, official data showed on Wednesday that sales of new single-family homes in the United States plunged almost 33 percent in May to a record low after the expiration of a tax break.
Copyright 2010  AFP Global Edition
