Oil extends losses in Asian trade.

Oil extended losses in Asian trade today as disappointing economic data tempered optimism that China's move to a more flexible yuan would lift energy demand, analysts said.

New York's main futures contract, light sweet crude for delivery in August, shed 28 cents to USD 77.57 a barrel while London's Brent North Sea crude for August delivery was 18 cents off at USD 77.86.

Sentiment was dampened by a report yesterday that showed US existing home sales slumped unexpectedly in May, renewing concerns over the fragile global economic recovery. Sales of previously-owned homes in the United States fell 2.2 per cent in May after two consecutive rises, the National Association of Realtors said, despite support from a government tax-incentive program.

"On the economic front, there has been a bit of negative news. The US existing home sales was quite disappointing," said Singapore-based Serene Lim, an oil analyst with the ANZ bank.

"I expect that the data for new home sales will provide some more downside pressure for oil," she told AFP. New home sales data for May were due to be released later Wednesday. Most economists expect them to plunge to 430,000 from 504,000 in April.

China's indication that any strengthening of the yuan would be gradual also doused optimism that it would lift demand for oil imports from the world's second-largest oil consumer, Lim said.

Investors will next look to the weekly government report on US oil inventories due today for an indicator of demand in the biggest oil consuming nation.


Source : Profit.NDTV