Oil slips to US$76 as euro weakens

Oil prices fell below US$76 a barrel yesterday in Asia as investors weighed growing global crude demand against a fragile euro.

Benchmark crude for June delivery was down 45c to US$75.92 a barrel on the New York Mercantile Exchange. The June contract fell 43c to settle at US$76.37.

Crude traders have been eyeing how the euro reacts after European policymakers unveiled a US$1 trillion debt bailout package this week.

Oil has fallen from US$87.15 a barrel on May 3 as the debt crisis undermined confidence in the euro, which touched a 14-month low of US$1.2520 last week. The euro fell slightly to US$1.2635 yesterday from US$1.2641 on Tuesday.

Crude supplies rose less than expected last week, gaining by 362,000 barrels, the American Petroleum Institute said. Analysts had expected an increase of 1.7 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill.

However, inventories of petrol fell while distillates were little changed, the API said.

Some analysts expect surging crude demand in emerging economies will help bolster prices.

"Oil market fundamentals continue to charter their own course, fairly oblivious to the incidents in Europe, as non-OECD oil demand continues to surprise to the upside," Barclays Capital said in a report.

In other Nymex trading in June contracts, heating oil fell 0.81c to US$2.132 a gallon, and petrol slid 0.52c to US$2.190 a gallon. Natural gas rose 3.3c to US$4.164 per 1000 cubic feet. In London, Brent crude was down 19c to US$80.30.

- AP